How to Boost Your ATO Tax Refund by $974 (Legally!)

Every year, around eight million Australians file their tax returns and, on average, receive a refund of around $2,500 from the Australian Taxation Office (ATO). This may sound like a decent amount that can boost your savings, but in reality many people forget about deductions they are entitled to. This mistake can cost them hundreds or even thousands of dollars. Especially if you have a good income, these missed deductions can mean the difference, not just in a little money, but in the amount you need for your next big financial plan.

In this article, we discuss six of the most common but often forgotten (and perfectly legal) tax deductions that you should be claiming to minimize your annual ATO dues and get more money back from your earnings.

1. Work-Related Education Expenses

If you have taken any courses, workshops, formal studies or any online learning efforts to enhance your skills this year that help increase your income, then their expenses are deductible under the rules of the ATO. Statistics show that on average Australians spend about $1,936 annually in this area, and for those working in the professional sector, this expense can be even higher. This expense can refund up to about $910 in your tax return, depending on your tax slab.

Self-education expenses can include course fees, seminar fees, books, software, and even transport expenses if you have to go somewhere for studies. The most important thing here is that you keep all your receipts and documents safe so that the claim can be made properly.

PRO TIP: If you are going to incur such expenses in the coming financial year, it would be better to pay them before the end of the financial year so that you can get both this year’s deduction and tax refund quickly.

2. Work-From-Home Expenses

Working from home has become common nowadays, so the ATO has offered a standard deduction for people working from home, which is 70 cents per hour. This method is easy but sometimes gives a refund less than your actual expenses.

If you have a separate place to work at home, you can claim your electricity bill, internet, office furniture, equipment like a desk and chair, and sometimes even part of the rent. For those who work from home a few days a week, this can bring a tax deduction of up to several thousand dollars.

However, it is important to keep in mind here that you claim only those expenses that are valid. The ATO keeps a close watch on this sector, so it’s important to keep the right documents and receipts.

3. Income Protection Insurance

If you have any income protection insurance other than your super fund, its premium is 100% tax deductible. If you have a good income and a high tax slab, it can bring back hundreds or thousands of dollars in your tax refund. You can get a tax return of 32% to 47%, which makes your budget very strong.

4. Investment-Related Expenses

If you invest in shares, ETFs, or property, there are many small but important expenses associated with it, which can be claimed for tax deduction. This can include interest on the loan taken for investment, property management fees, financial advisor fees, investment account fees, and subscription fees to research or financial journals.

If you refinanced your mortgage this year, the setup fees and exit costs may also be deductible over a five-year period. Often these expenses seem small, but when added up, they add up to a big benefit in your tax savings.

5. Professional Memberships and Subscriptions

If your work makes you a member of a professional body or association, or you need to subscribe to software, magazines or journals for work, this expense is also fully tax deductible. This could be a membership to an industry body, a professional tool like LinkedIn Premium, or any software that meets your professional needs.

For professionals, these expenses can run into thousands of dollars a year, so make sure you claim them. Doing so will greatly improve your tax refund.

Bonus: Along with deductions, proper structuring is also important.

It is wise to take full advantage of tax deductions, but an even bigger opportunity is to structure your income and investments properly. Many people pay a huge amount in tax even after deductions because they did not structure their income and investments wisely.

If you want your investment income to eventually replace your salary, structure it in a way that maximizes tax savings. For example, it is better to hold your investments through a trust, company or investment bond rather than keeping them in your name. This reduces taxes and your investment income grows faster.

Conclusion

Tax return time should not be an opportunity to just run for receipts but a time to ensure that your earnings work as hard as you put in. While the average Australian tax refund is $2,576, with the right planning and better deductions, this figure can go up to $3,550, meaning less money in your pocket. That could be as little as $974 more.

Most Australians miss out on the money they deserve and work harder for it. When you play by the rules of tax wisely, you can keep more of your income and make better use of the resources you already have. Making small changes today can lead to big savings in the future.

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