Keeping tax time stress-free

As we start to move towards tax time, stress levels can begin to rise. The reality of completing your annual income tax return can be a daunting prospect, and it may not always be easy for you to keep track of all of your paperwork over the last financial year.

Remember it is required by the Australian Taxation Office (ATO) to keep every single document that relates to your lodgement as proof to your claims.

To help you feel more in control of the tax time process, we have compiled a list of handy tips, so you can submit your return as smoothly as possible.

1. What records do I need to file away?

The ATO has made it easy to get your head around which documents from your past financial year that you need to hold on to through a hub of information on the Records you need to keep webpage. The information will help you to understand which records are required against your deduction claims.

2. How do I keep track of my electronic records? 

This can be made simple, either with the myDeductions tool in the ATO app or with downloadable mobile apps that are connected to other popular software applications which will help to effectively keep records. 

The myDeductions tool within the free ATO app can be downloaded from your app store of choice to your mobile device, and can help keep records of:  

• any work-related expenses (including a logbook feature for car trips)
• gifts or donations 
• cost of managing tax affairs
• other deductions.

Remember, the records you keep don’t have to be paper-based; electronic receipts or photos of your receipts are also acceptable. All the physical records you keep can be photographed and stored electronically using the myDeductions tool. 

When tax time rolls around, you can choose how to lodge your tax return, either by sending the records to your registered tax agent or by uploading them into the ATO myTax online lodgement system. 

Aside from the myDeductions app, there are other apps available on your app store, which may similarly maintain data to help you successfully lodge your own return.
The information you’ve collated can also be forwarded to your registered tax agent so they can prepare and lodge the return on your behalf. When downloading an app to maintain your tax records, it’s important that you ensure it adheres to Australian tax standards, and that it keeps all the information your ATO requires for the return. 

3. Can I lodge my tax online?

You can lodge your tax return online using myTax. To get started, you’ll need a myGov account linked to ATO online services.

Lodging online is quick, easy and secure. The best time to lodge is late July when a lot of your information has been automatically included in your tax return – including income, bank interest, health fund details and government payments. You just need to check the information is correct and add anything that’s missing.

You have until 31 October to lodge your return. Visit the ATO website for more information.

4. Will a registered tax agent be able to help me?

A registered tax agent can provide you with guidance about maintaining your tax records, as well as helping you to prepare your tax return and lodge it online.

This will give you peace of mind that your return is completed in a timely manner, with complete accuracy. Another benefit of using a registered tax agent is that you can claim a deduction for the expenses you incur in engaging their services to lodge your return.

5. How should I organise my documentation? 

We have a tip to help with this – use a checklist.

You can either create your own checklist, or download one from the website of a registered tax agent. 

Your checklist will need to include the following items:

Income

• Income statements or payment summaries from employers
• Lump sum and employment termination payments
• Government payments (including taxable COVID-19 support payments such as the Pandemic Leave Disaster Payment)
• Interest from banks and other financial institutions
• Dividend statements
• Paid spouse details, including taxable and exempt income
• Other income (e.g. from rental property income, foreign income, capital gains from shares or crypto).

Deductions

• Work-related expenses, such as:
  o compulsory uniforms or protective items such as scrubs, face masks and gloves that were not provided or reimbursed by your employer
  o self-education and professional development
  o union, registrations, agency fees, tools, subscriptions, seminars, conferences
  o working from home expenses 
  o purchased COVID-19 tests used for a work-related purpose that were not provided or reimbursed by your employer
• Donations to registered charities or building funds.

Offsets and rebates

• Private health insurance rebate and offset 
• Zone tax offset 
• Low and middle income earners tax offset
  
   

5. Where could things go wrong?

There may be a rare possibility that there are issues with the records you’ve been maintaining to prepare for your tax return. These records could potentially become lost or be inadvertently destroyed. 

In this worst-case scenario, you must ensure that you make an effort to obtain a copy of your records. If you are unsuccessful in doing so, you may need to provide evidence to the ATO that you have tried, if asked.

If you have misplaced or overlooked documentation, you could possibly be short-changing yourself when you lodge your return.

It is not a good idea to guess amounts for any of your deductions. In fact, it can easily result in penalisations and interest for making incorrect claims. Even it is not mandatory to present all your documents in the lodgement of your tax return, you must have records to substantiate your claim if you are queried by the ATO.

Note: The information contained in this article is not to be taken as taxation advice. You should always consult a registered tax advisor for all tax-related matters. This article was originally published in July 2019 and updated in June 2022.