How to get $ 1,500 back from your taxes
As the deadline for filing your tax return approaches, you could get an extra pile of cash in your pocket, according to this tax expert.
October isn’t just Halloween – it’s also the deadline for filing your tax return if you’re not using a tax agent.
As October 31 gets closer and closer, your time is almost over to file your return for this fiscal year.
There have been several changes in the tax brackets this year, which means some Australians may receive more money by submitting their return.
According to Mark Chaman, director of tax communications at H&R Block, these changes in tax thresholds and the extension of tax compensation for low and middle incomes mean that you “probably” earn $ 2,160 this year if you earn between $ 48,000 and $ 90,000.
“All of this will not come back to you through your tax return, but all of the tax compensation for low and middle incomes ($ 1,080) and about a third of the tax reduction due to changes in income. thresholds – totaling approximately $ 1,500; the rest will have already been received through your salary or your salary, âsaid Mr. Chaman.
He said if you earn less than $ 126,000 you will get at least some or all of the compensation.
âFor those who earn less than $ 37,000, the compensation is $ 255,â Mr. Chaman said.
âIf you earn between $ 37,000 and $ 48,000, the compensation will increase to a maximum of $ 1,080.
“Those with annual incomes between $ 48,000 and $ 90,000 will receive the full compensation of $ 1,080.”
However, Mr. Chaman said people who earn more than $ 90,000 will see the compensation gradually wear off.
âIf you earn more than $ 126,000 a year, you won’t get any compensation on your tax payable for the year,â he said.
Homework deductions could run into the hundreds of dollars
Mr Chaman said he “pays to be smart” when he claims work-from-home expenses.
He said there are three different methods you can use to claim your deductions: the flat rate of 80 cents per hour; the flat rate of 52 cents an hour; or the “real” method.
âCrucially, although it may seem the most generous, the 80-cent rate doesn’t allow you to charge anything else for working from home,â Mr. Chaman said.
“The 52-cent rate, however, allows you to make separate claims for the proportion of work-related items such as your home internet, mobile phone costs, depreciation of computer equipment, stationery and printer ink. . “
Mr Chaman said that for someone who worked from home for the entire tax year, these additional deductions could amount to around $ 1,200.
This equates to $ 390 in additional tax refund, calculated at the 32.5% tax rate.
What you need to know to avoid a fine
If you don’t file your taxes by October 31, 2021, or if you haven’t registered with an agent by that date, you could face a âstiffâ fine.
The âfailure to fileâ penalty is calculated at the rate of one penalty unit for each 28-day period or part thereof during which the declaration is late, up to a maximum of five penalty units.
âThe value of a penalty unit is currently $ 222, so the maximum penalty that can be applied for an individual is $ 1,110,â said Mr. Chaman.
The âgood newsâ is that penalties are generally not applied to returns with a NIL result or to returns that generate a refund.
âIn addition, when a sanction is applied, the ATO will sometimes remit it when it is ‘just and reasonable to do so’, for example in the event of a natural disaster or serious illness,â said Mr. Chaman.
According to Mr. Chaman, most people who earn above the tax exemption threshold, which is currently $ 18,200, are still required to file an income tax return.
âIn some cases you may be required to deposit even though you earn less than this amount, for example if you have worked and the tax has been deducted from your salary,â he said.
To avoid being fined, Mr. Chaman said that you only need to be registered as a tax attorney client before October 31, 2021.
Thus, you can file your tax return with your representative until May 15, 2022.
Image by Kelly Sikkema on Unsplash