A new study has revealed that 65 per cent of Australians consumers feel they should know more about tax.
The nationwide survey, commissioned by leading EOFY retailer Officeworks, unveiled that despite 80 per cent of Australians submitting their tax return each year, they are still missing out on $10.6bn2 of unclaimed taxes.
The research also revealed that one in 10 are boosting their incomes through the sharing economy – offering their space or services through platforms like Uber, Airtasker or Airbnb. but 31 per cent weren't aware of any benefits available to them as part of their side hustle.
Personal finance expert Nicole Pederson-McKinnon commented on the findings: "What concerns me is there seems to be lack of understanding about all the deductions available to people with a second source of income. It's really important to educate yourself on all the items you can claim, office supplies including technology and furniture are among the chief claimable spends.
"There's also a compelling reason to make any deductible spending before the tax year ends in a few weeks' time, rather than wait until it clicks over to the 2019-2020 tax year. Many Australians are scheduled to get a tax cut come July 1, so by maximising your deductions this year, you may be able to effectively achieve the same thing for yourself this year too," she said.
Two in every five 25-34 year olds surveyed said that the prospect of doing their tax returns made them feel anxious, despite it being a time of potential financial gain.
Officeworks spokesperson, Sandy Young, said: "Tax time can be overwhelming and complicated for some people, especially those who decide to tackle their tax return on their own. But it doesn't have to be – speak to an expert, they can provide guidance on what you can claim and identify exactly what you need to do to get sorted and, ultimately, maximise your return.
"If you have a side hustle or own your own business, this year we've teamed up with H&R Block to create a website with handy tax tips and information, visit officeworks.com.au/workwise to check it out".
To browse a wide range of products that could be tax deductible, head to officeworks.com.au/EOFY
Question: Are you surprised that Australians will miss out on an estimated $10.6bn in unclaimed taxes this financial year?
Nicole Pederson-McKinnon: I wish I could say I was! But the fact is that with many people now taking on extra work, particularly in the sharing or 'gig' economy, many don't know the extent of what they can claim.
Question: How can we ensure we are not missing out on unclaimed taxes?
Nicole Pederson-McKinnon: Do your homework on the 2019 tax cuts. With tax cuts scheduled for many Australians next financial year, it is attractive to cut your tax this year by bringing forward any planned deductible spending. Similarly, it might be advantageous to do what you can to shunt further income into next year – so bonuses, commissions or overtime payments. If you are classified as self-employed (like most workers in the gig economy) you can access the same tax concessions that small businesses do. A big one is the $30,000 instant asset write-off for capital assets, or items used in your business… computers included.
Question: How can we make the most of our tax return and EOFY?
Nicole Pederson-McKinnon: Be conscious of the benefits specific to your profession. What you can deduct for tax purposes will vary depending on your job, but common items include stationery, tech and furniture. You might be able to claim unexpected deductions on a second job, side hustle or 'gig'.
Question: Where do we find information on what we can deduct?
Nicole Pederson-McKinnon: You can search for a list relevant to you on ato.gov.au.
Question: Can you share your advice on preparing ahead of our tax return?
Nicole Pederson-McKinnon: Suppress that groan and get out the receipt shoe box. Actually, hopefully you'll have all your receipts recorded on a handy app, or you'll have used a business credit card for your every deductible purchase... and have the statement as proof (although you will need receipts too if audited). It's vital not to miss anything you can claim... it could all add up to a decent amount.
Question: Is being organised for tax-time an all year exercise?
Nicole Pederson-McKinnon: Timing is key for your end-of-financial-year spend to be deducted against your earnings this tax year, it must be purchased before June 30 2019… and you need the receipt to prove it. So start on next year's tax return as you are busily preparing this one - you'll be super grateful this time next year.
Interview by Brooke Hunter
Photo by William Iven on Unsplash