top tips for doing your tax return in 2023 + your tax checklist

Time for some tax tips! Here are all the documents you need to prepare for lodging your tax return, and some important tips you need to know. Tax time isn’t hugely exciting, but we can at least help make it less stressful. Keep this list on hand as you prepare to send everything to your accountant or submit it yourself. Also check out this episode of my millennial money with Chartered Accountant, Aimee, where Glen digs deeper into this topic:

Remember, if you’d like to be connected with an accountant, reach out here.

To prepare your tax return in Australia, you typically need the following documents and information:

1. Payment Summaries (previously called Group Certificates): these are provided electronically to the Australian Tax Office (ATO) by your employer, showing your income and the amount of tax withheld during the financial year.

2. Working from home related expenses: keep records and receipts for costs associated with your wfh and chat with your accountant about whether the revised fixed rate method or the actual cost method suits your situation better when claiming deductions (read below for more info on this).

3. Investment statements: if you have investments such as shares, managed funds, or rental properties, you will need statements showing the income earned and expenses incurred.

4. Business and self-employment records: if you run a business or work as a freelancer, you will need records of your income and expenses, including sales invoices, receipts, and business-related deductions.

5. Deduction records: keep track of any work-related expenses, charitable donations, or other deductions you plan to claim. Receipts, invoices, and other supporting documents should be retained.

6. Private health insurance statement: if you have private health insurance, a statement will be sent to the ATO from your insurer showing the details of your policy and any premiums paid.

7. Income from other sources: if you have income from other sources, such as rental income, government payments, dividends, or foreign income, ensure you have relevant documents and statements.

8. Higher education expenses: if you are studying or have incurred expenses related to higher education, gather documents such as payment summaries and loan statements.

9. Previous tax return: having your previous year's tax return can be helpful for reference and continuity.

It's important to note that this is a general list, and individual circumstances may vary – chat with your accountant for any specific documents you need to provide outside of this list. Read below for further details to consider around investments like shares and property.

what documents do I need to keep for shares?

You need to keep records of all your transactions associated with acquiring, holding and disposing of shares or units. This can include:

• receipts of purchase or acquisition that shows the price and dates, along with any contracts

• the income received – which can be found on dividend or managed investment distribution statements

When you dispose of shares (like selling, gifting or buy backs) it’s a capital gains tax, or CGT event, so you’ll need to calculate any capital gain loss and include it on your tax return.

You also need documents that show what it cost you to obtain, hold or sell the shares, including:

• what you received for the shares from sales details and statements 

• brokerage fees on purchase and sales

• accountant and legal costs

• if you borrowed funds to obtain them – interest on any money you borrowed relating to the asset.

what documents do I need if I turned my PPOR into an investment property?

If the property was your home (your main residence) and you didn’t earn any income from it, you can’t claim any deductions.

But, if the property was your main residence and you earned income from it, like renting it out or renting out a room, then you may claim expenses for that part of the property for the period it was rented.

Be mindful, when you claim the property as an investment, you will need to consider capital gains tax when you sell. You may still be eligible for the main residence exemption after you start renting out the property if you don’t treat any other property as your main residence.

You can find information at ato.gov.au/rental

what do I need to know if I worked from home?

The way you calculate your working from home deduction has changed. When lodging your return for the 2022-23 income year, there are two methods available – the revised fixed rate method, and the actual cost method. 

The revised fixed rate method has increased to 67 cents per hour worked from home, and covers your costs for electricity, gas, stationery, computer consumables, internet and phone usage.

You can separately claim a deduction for expenses not included in the hourly rate. For example, the decline in value of depreciating assets, such as a laptop or office furniture. You no longer need to have a dedicated home office to use this method.

If you’re using the revised fixed rate method, you’ll need records that show the total number of hours you’ve worked from home, as well as at least one record for each of the expenses you incur that are included in the fixed rate method, such as phone or internet bills.

A transitional provision is in place for this year only – allowing you to keep a representative record of your hours worked from home for the period 1 July 2022 to 28 February 2023 only. From 1 March 2023, you will need records of the total number of actual hours worked at home.

What’s the deal with car expenses?

The cents per kilometre rate has increased to 78 cents per work-related kilometre for 2022-23. This method allows you to claim up to 5,000 work-related kilometres, per car, but you must be able to provide records that show you own the car, and how you worked out your work-related kilometres.

Top tips for tax time

1. collecting your records

If you’re claiming work-related expenses, you must have receipts. Try the myDeductions tool in the ATO app. It’s a fast and easy way to capture and store your records and receipts on the go by simply snapping a photo. You can upload your records straight to your tax return, or to your registered tax agent by email.

2. when to lodge

The best time to lodge is from late July, when most of your information from employers, banks, health funds and other government agencies has been automatically included in your tax return. 

All you’ll need to do is check the pre-filled information is correct, add any income and other information that’s missing, and claim your deductions.

3. claiming work-related expenses

• There are 3 golden rules when it comes to claiming a deduction for any work-related expense.

1. You must have spent the money yourself, and weren’t reimbursed

2. It must directly relate to earning your income

3. You must have a record to prove it – usually a receipt.

• There have been some changes to how you calculate common deductions this year, such as vehicle expenses and WFH costs – so don’t be tempted to ‘copy and paste’ your claims from prior years. 

• Check out our range of occupation and industry-specific guides. They’ll help you work out what you can and can’t claim at tax time based on your occupation. Visit ato.gov.au/occupations 

The ATO has a series of factsheets with information about common deductions and record keeping. Find them at ato.gov.au/commondeductions

Something to note: the low and middle income offset has ended

What does this mean for taxpayers?

With the low and middle income tax offset ending, many people may find that their refund is lower than expected, or they may have a tax bill this year. You can find out more about what might impact your tax outcome on our website at ato.gov.au/mytaxresult. 

We know cost of living pressures are impacting many. If you get a tax bill and can’t pay it in full, in most cases you’ll be able to set up your own payment plan online. It’s also important to keep your lodgments up to date – even if you can’t pay immediately. If you need extra support, we are here to help you manage your obligations. 

You can find out more on the website at ato.gov.au/cantlodgeorpay

3 tips from the ATO for superannuation

1. Most people tend to ‘set and forget’ their super until they’re closer to retirement – but it’s really important that you’re keeping track of your super.

2. This year the ATO introduced the Super Health Check. And while you can do the Super Health Check at any time, we suggest you do it at least annually when you’re lodging your tax return. 

3. The Super Health Check consists of five simple checks:

   1. Check your contact details 

   2. Check your super balance and employer contributions 

   3. Check for lost and unclaimed super  

   4. Check if you have multiple super accounts, and consider consolidating  

   5. Check your nominated beneficiary.

Visit ato.gov.au/superhealthcheck to get started.