She's On The Money - Let's Simplify Tax Time!

Episode Date: June 28, 2022

Feeling overwhelmed at EOFY? Don't worry, we've got your back! In this episode we give you tips and tricks to simplify tax time; from some of the most surprising things you can claim, to what you should do if you have investments. Victoria and Georgia will have you rolling into the new financial year full of confidence!Acknowledgement of Country By Natarsha Bamblett aka Queen Acknowledgements.The advice shared on She’s on The Money is general in nature and does not consider your individual circumstances. She’s on The Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. Victoria Devine and She's On The Money are Authorised Representatives of Infocus Securities Australia Proprietary Limited ABN 47 097 797 049 AFSL - AFSL 236523.See omnystudio.com/listener for privacy information.

Hello, my name is Natasha Nabanunga-Bamblett. I'm a proud Yorta Yorta, Kernai, Wolperi and Awadjeri woman. And before we get started on She's on the Money podcast, I would like to acknowledge the traditional custodians of the land of which this podcast is recorded on Awadjeri country, acknowledging the elders, the ancestors and the next generation coming through. As this podcast is about connecting, empowering, knowledge sharing and the storytelling of you to make a difference for today and lasting impact for tomorrow. Let's get into it. She's on the money. She's on the money.

Hello and welcome to She's On The Money, the podcast for millennials who want financial freedom. My name is Georgia King and joining me as she does each and every Wednesday is Victoria Tufine. V, how are we? I'm well. I just had one of those Listerine pocket pack fresh strips. When was the last time you had one of those? So retro. I think in primary school, man. I was craving that fresh breath feeling. I carry them everywhere I go and we were just talking and I was like, when was the last time you had one of these? And you were like, absolutely never because they are outdated.

But they're delicious. They're underrated. They're not delicious. But if you want fresh breath in an instant, Listerine Pocket Pack are going to get you. Do you reckon they'll sponsor us? I reckon they should. For a $3 product, they pack a lot of punch. Not bad.

Alrighty, guys, the last financial year has been a difficult one for many, with significant changes in working conditions due to the ongoing pandemic. And with the end of financial year looming, many Australians are hoping for a bit of relief and wondering if this might come in the form of a bigger tax refund this year. Oh, very sexy. So today on the show, Georgia King, I am going to take you through a number of things. Let's list them off. We are going to run through what you as an individual need to prepare for tax time. Very exciting. We're going to talk the tax offset. We're going to talk about what you can claim and what you can't claim. We're going to talk about what you need to look out for and where

you can get some more information. We're going to take you through everything you need to know when it comes to your investments, when you need to get an accountant. And we're obviously, Georgia King, also going to help you feel empowered about this process because it can be so overwhelming. Absolutely, it can. Before we go anywhere, Stats Girls, enter in the chat. Hello, Stats Girl. Welcome to the show. Did you know, Vicky D, you probably did, that around 14 million people lodge a tax return each year in Australia? I mean, that makes sense. Thank you for that, Stats Girl. Of those who receive a refund, about two-thirds, On average, they receive just over $4,000 each.

That's so much money. Resulting in a collective refund of more than $3 billion. But V, some tax cuts have been implemented for middle and low income earners over the course of the pandemic. The panini. The panini, as you are really pushing. Who gets it and how does it work? The panini. The panini.

The panini is a thing. We're making it a thing. I don't think it's caught on, Justin. It's only caught on with me and everybody I've said it to is like, you're a loser, sit down. So the Australian government created this tax offset a few years ago to boost the incomes of low and middle income Australians. The offset is still around this year, money win, meaning that millions of eligible taxpayers across the country are going to receive anywhere between $255 and $1,080 as an offset against their taxable income for this year, which is kind of helpful. I'm glad

they've kept it around, especially after the past few years that were. And then for many, this will then flow into a larger tax refund that they were probably already expecting. The offset amount really depends on how much you already earn. For example, you need to earn less than $126,000 to actually qualify for this. And you don't actually have to do anything in particular to receive it. You just have to earn under that amount. It will automatically be calculated as part of your tax return when you do it. So, gee, the sooner the better when it comes to doing this. Didn't know that was in place. Money win. V, what are some basic things I need to remember when it comes to doing my tax return?

That one, it is important to actually do your tax return. If you've had your head in the sand for a few years, and I've heard this recently because people like Victoria, it's just so hard and now it's overwhelming because it's been five or six years and I haven't done a tax refund, which actually does happen. It's okay. You can see an accountant, which is exactly what I would recommend you do and start getting that ball underway. You can still submit them. There's just a bit of a different process to follow. And the sooner you're on it, the sooner you're going to feel less anxious about that process. Like just get it done, just get it done. And very likely it's not going to be nearly as overwhelming as you think it's going to be because you're probably

going, oh my gosh, I'm going to be fined and I'm going to do this and I'm going to do that. But the refund often ends up offsetting how much the penalties are. And if you've got a good accountant, they're often able to be like, look, she really didn't know what she was doing. Can we wipe this and have a conversation and just get an accountant on your team because that's an anxiety you don't need to live with. Back onto actually what you need to do when it comes to your tax return this year. Often getting your refund back is held up a bit because people are making really basic mistakes, G. It's not because the ATO are taking their time. A lot of this, as I've said before in the pod, is data fed. And if the data isn't crystal clean and perfect,

it needs to go through a manual process. And that's the manual process that takes a bit longer. So if your name or address has changed, make sure that you update your ATO information before lodging return. If you're lodging your return under different details, the ATO's data matching technology isn't able to match it to your TFN. So if they can't match your tax file number, a manual person has to get involved. And as you can imagine, when that happens at scale, as you said before, 14 million people submitting their tax returns, even if just a small amount do it wrong, that's a very long list of people that need to get manually done. So don't put yourself in that bucket. You need to make sure as well that your bank details are correct. So

if you've changed banking products or changed banks recently, make sure you update those because all tax refunds now are done by direct deposit, meaning nobody at all ever is going to get a check in the mail from the ATO anymore. So making sure your bank details are correct is going to be important. Use spellcheck, Georgia King. It's very important. If you see the little red squiggly line, click it, my friend. So if you've added an extra letter or accidentally spelt something wrong in a key field. It's going to delay your tax refund significantly because as I said, manual matching process has to occur. And I promise those people are probably pretty pissed off that Georgia King had two A's on her name and they just had to backspace it. And that was

the entirety of their job. Just do it right the first time, my friend. Then what I want you to do, G, is also make sure you're adding in all of your income, all of your shifts from Uber that you did last October for that one time that you thought you were actually going to do that, or that shift at a cafe where you were like, oh, I'm going to pick up this Sunday job. And then you realized you didn't want to do that anymore. And now you just have a full-time job. We can't forget about these things because this is where you're going to run into trouble. You do have to pay tax on those jobs, even if they were really fleeting. So not claiming income is something that the ATO has been coming down on really, really hard recently on, especially with the

rise of the gig economy. They're trying to be far more on top of it because they're like, well, we need to really capture all of these income streams that people are, you know, going out earning and making sure that we're taxing them appropriately. So just do the right thing, not because I'm trying to tell you to avoid tax or not. I'm literally just doing it because it's going to take longer if you submit your tax return and gee, some random cafe out in Whoop Whoop has your details because you worked one Sunday shift one time and you didn't claim it. Yeah, exactly. Because everything is data matched these days. Like somewhere, somehow there is going to be a record of that. Just make sure it is on your actual tax return. So would you say maybe keep

a little spreadsheet with a little income streams along the journey. Girl, I am always about keeping a spreadsheet. So absolutely if that's down your alley, but also the other thing is probably don't try and be too fast to do your tax refund. I think a lot of people really go, oh my God, it's June 30. I need to get my tax refund ASAP. And I totally get it if you need the cash, totally. But businesses actually have up until June 30 as like that cutoff date for reporting on their finances. It's then going to take me a little bit to get your group certificate together, And this happens in my business as well. So I'm going to sit down this year with my accountant and I'm going to go, okay, cool. It's tax time, end of June 30. I need to get all of my team,

their group certificates so they can submit their tax. I need to upload everything to the ATO and get it all done as an employer. That doesn't just happen on June 30 because June 30 is the last reporting day of all those finances. Like what if you took annual leave on June 30? Or what if you actually had some sick leave balances or whatever I need to work out? I need to do that for my whole team. So usually my team get their group certificates like at the end of the first week of July, because I just need a little bit of time to get my stuff together. It's not just me who does that though. The bigger the business, the more that can take. And it's very common to not get your group certificate until like mid-July or even late

July. I'm not saying it's appropriate. We want it ASAP, but understand the process. It's not going to be in your inbox on June 30 to submit at ASAP. Just back to the gig economy as well, we did do an episode a couple of weeks ago on tax and side hustles. So if you haven't listened to that one yet, so that you would have the resources you needed by the time tax time came. All around tax time. It's like we had a spreadsheet, George. You know, G, another thing to keep in mind is being proactive about tax time instead of reactive. That's such good information coming from somebody who's always reactive instead of proactive. So cute from me. But once June 30 has come and gone, by the way, that's my birthday. So if you don't say happy birthday to me, I'll be

kind of salty. You need to wait another 12 months before you can claim an expense on tax. So if you're looking at purchasing something for your business or something that you're actually able to claim, kind of now is the time to shine, my love. Like go and organize that now instead of after June 30, because if you do it after June 30, you have to wait a whole other 12 months to claim it. In saying that, can we please stop justifying June 30 purchases as small business owners? Like you do not just need a new laptop because you think you'll get a tax refund. You still have to pay for the laptop. Like that's still coming out of your business cash flow. So I think we need to be a little bit smarter about it because my new iPhone is telling me to tell you that.

Okay. While we're on the topic of claims fee, what are your tips on making the most slash not doing a dodgy. Not doing a dodgy. Yeah, just don't claim things you can't claim. Fair enough. Don't claim things you didn't spend money on. Stop with this idea. Like this, this grinds my gears, right? So it wasn't in our Facebook group because our Facebook group is full of very smart, very intelligent people who do the right thing. This was in another Facebook group that I'm in and people like, oh, don't forget you can claim up to X amount without receipts. yeah you can but you still have to have spent that money yeah like that is so dodgy it's not funny and the ato is coming down on that they're gonna go gee you're a podcaster what do you mean

you spent 50 on sunscreen like that's not related to your job they'll ask you for the receipts and they are getting better and better at asking for receipts because as data matching gets more intelligent ai starts to come into it they just like pop it up and send an automatic email to you to be like, hey G, you claimed this. Please provide with the receipts. You're going to end up with a penalty if you're claiming things that you weren't meant to claim. Just do the right thing. Stop trying to be a sting. Like, oh, let's move on. So our advice is not to put mayo on our claims. What happens if you actually paid for that mayo and it was related to your job, in which case you are more than welcome to claim it. But stop claiming things that you're not eligible for just

because you want a bigger refund because that ain't incis. What happens if we get audited? You get in trouble. So don't embellish is the number one rule. But obviously, as I said before, super common misconception that you can quote, claim up to $300 without receipts. Like that is not it. People who are lodging their own tax returns using the ATO's MyTax software are monitored by the ATO's AI software as they prepare their returns to make sure that people aren't over claiming and doing the wrong thing. Like they actually track it. It's kind of scary. but at the same time it makes sense and they also have these buckets right so the way that it works and this is just like a kind of like the way it works in the back end in the technical way I'm

calling them buckets but like let's say you're an executive assistant they're going to have a group of people that they will compare you to that are also executive assistants and there will be common claims and then there'll be uncommon claims so if there are uncommon claims coming through that's going to raise a red flag and you're more likely to be audited so it's really important to get your job classification correct as well, because it could put you at risk of being audited or not, or actually getting in trouble or not. So the best thing to do is actually just the right thing. So if you're then found to, let's say, you have claimed something that you weren't entitled to, it doesn't just mean you have to repay what you claimed back and you just got caught out.

You're actually then paying an interest rate of 9% per annum as well. On top of that as well, so you've got your 9%, you have to pay your staff back. But if the ATO then also believes that you were being super careless and maybe a little bit naughty and doing it on purpose, they'll then slap you with a penalty of anywhere between 25 and 95% Georgia King of the tax avoided. Right. That's not worth it. It's not worth it. Not worth it, friend. Don't do it. So the easiest way to keep track of your spending from my perspective, one, the ATO app is really helpful because you can keep track of things that you're going to claim throughout the year. You can snap a quick picture and upload it. If you're anything like me, you don't want to have to have that app, even though it works

really well and it makes a lot of sense. You're just trying to put another step in the process for no good reason. You have an album on your phone where you just snap away at things. And then when tax time comes, you actually just go into that album and have a look. And then obviously keeping a budget's a good idea always. Just stick to it. I did the old album trick. Did it work? I have one receipt in there. Oh, but at least you set it up. I know my intention was good. The intention is always good. But I do that as a business owner because there's so many different things that go different places. It's so frustrating as well. Like, you know what, I could go on about this, but we only have one debit card for She's On The Money, the business.

So sometimes I like pay for things in my personal name because Jess has got the card for work or something and then I need to claim it. It's just, it's a little bit confusing. It's a headache. It could be much easier if I just listened to my accountant properly, but who's going to do that? That's so silly. Do you know, Bea, how much of your data is pre-filled on your tax return? Is it all set and forget? It's not all set and forget.

It really depends on, one, if you've done it before and then how much personal and financial information you've given to employers or to the ATO. But essentially, when you log into the ATO's tax system, often a lot of your information is already there and you'll be like, where did they get that from? And it's usually either from your previous employers, from your current employer or from you having done tax returns in the past, which is kind of cool. It's actually really helpful when it comes to pre-fill because it means that you don't have to do it over and over again. And if you've done this a few times, it kind of becomes like second nature. You just log in, check all your

details, make sure everything's correct. Was that my income this year? Yes, it was. Was there anything I needed to claim? Yes or no. Or hey, here's this petrol that I did X, Y, Z on. How much did my investments make this year? Pop that into the boxes. Like it's actually much simpler than people seem to think it is. I think we think back to like 2009 when you definitely weren't doing your own tax, but I was, George. And it was a lot more complicated than it is today. I don't know. Have a look. Give it a go. You don't have to submit it if you're overwhelmed. V, do we want to go to a little break here, my girl? I would love to go to a break because tax is boring, Georgia King. It really is. But on the other side, guys, we'll be getting into the juicy stuff,

talking about what we can actually claim. Just some people can claim dogs on tax. not me though go to a break go to a break we'll talk about it after all right we are back talking tax victoria oh my gosh what a dream let's jump straight into what we can actually claim you mentioned before we can claim dogs or someone oh look someone can somewhere someone has claimed a dog but you can claim a dog if a dog is actually part of your work. So like mainly, obviously people in farming or security, they could claim their dog related expenses. There you go. We should go into security. I reckon Lucy would be a good guard dog. Absolutely she would. Not. Anyway. Tell me what else we can claim. Look, there are lots

of things that you can claim. Again, please don't take this as a list of things that Victoria is suggesting you claim on. It's not. It's just educational. We're just talking about tax, trying to make it a little bit less dry than it actually is. But one of the things that I can claim. It's my handbag, Georgia King. What? Why? I can claim it. Stick your laptop in it? Yeah. It's a work bag. It can't be a fancy designer bag though, because the ATO are going to have some bucklies with that. They're not going to like that. It does actually have to be practical and reasonable in nature. So you can't just go buy like a Chanel boy bag and be like, oh, it's my work bag. It's actually to carry your work things to and from work if you carry a

laptop. You can claim shoes. We love shoes. We love shoes. Except you can only claim shoes if you're like a flight attendant. So it's not as good as what you would think. Like a good pair of Jimmy Choo's ain't going to happen this year for me on my tax return. If you work outside, you can actually claim makeup that has SPF in it. Kind of cool, right? Wow. And SPF related products, because obviously if you are in the know, you know you should be wearing SPF. But also if you work outside, you get a little cheeky tax deduction on it because it's for your health. Cute. Charity donations. Anything over $2 you can claim. So keep track of those. The interest you earn from your investment income. That's very sexy. Sex toys, Georgia. You were looking a little bit dry

on the things that I was running through. So I'm just going to throw that one in there. Yep. If you work in the adult entertainment industry, AOTA have a special guide about what you can claim if you're an adult industry worker. Interesting. You can claim things like dance lessons or hair care or oils or tissues or lingerie or costumes. Wonderful. Kind of cool that you can do that. Another one. Garden gnomes. Do you want to claim your garden gnomes? This obviously is its own dot point in itself. Like this is made it as a line item in our spreadsheet for this planning episode. But landlords, they're able to claim garden gnomes because obviously it is a property related expense. That is incredible. Wait, what's the deal with garden gnomes? Are they meant to

like get rid of snails or something? I have no idea the purpose of a garden gnome. Like a little scarecrow. Do you know there's this house that I walk past every single morning and if you live near me and you've seen me walking in the morning, you know this house, you know what I'm talking about. You walk past it, it's got like a low picket fence and then you look into the garden and the entire front garden is like full of garden gnomes. There's nothing weird about that. It's so strange and this house also has like gargoyles on the top of it. It's kind of creepy but the creepiest part about this is all of these garden gnomes have quite clearly been very dodgily hand-painted. So like, it's low-key creepy, George. No, but maybe they're just really

smart when it comes to tax dollars. If that is your house, I'm so sorry. I'm so sorry. But then obviously there are some smart things that you can claim. So if you've been working from home over the last few years, you can claim your home internet and any of those working from home expenses. Have a look on the ATO website. There is an entire guide for working from home and claiming what you can claim. There's also two ways of going about it. You can either claim a set amount or a cents per dollar. And I think you need to do the calculations on which one works out better for you instead of just looking at that big shiny set amount dollar and going, let's do that. So definitely have a look into that. You can obviously also claim financial

planning expenses and your accounting fees and stuff like that. But there's an entire list. There is a blog on our website that I wrote a couple of years ago about what you can and can't claim. So I would be checking that out, Georgia King. You've also got subscriptions to work-related magazines and journals if you work in the media. I didn't know that. We can claim Vogue. Yes, thanks. I'm going to go sign up for that ASAP. This is great. Before we move on, V, when we say claim, is that a percentage of the cost of whatever we bought and are claiming or is it like the whole thing? No, it's not going to ever be the whole thing. It would be the tax component of that. so if your marginal tax rate is 32 cents in the dollar that is what you're claiming you're not

claiming like oh my god i spent a dollar i get the whole dollar back it's free like that's not how tax works perfect sorry i'm sorry good to know so v do we need to pay tax if we receive gifts as payment i'm talking about influences specifically in this space that's such a niche thing to bring up as somebody who does have a lot of clients who work in that social media sphere and earn a lot of money, but also get a lot of gifts. Yes, they are actually taxable. And I have actually spent, I think I mentioned this on the podcast last year, I have been going back and forth with our lawyers to work out how this works because it's such a new space that the ATO hasn't come out and directly said, this is taxable, this is not. Because obviously, gee, if I turned around

and said, hey, gee, here's a Listerine pocket pack of fresh breath strips, you are welcome. that's like a genuine gift but if an influencer is given that with the intention of posting about it and generating income that is actually then taxable so it's quite confusing and a couple of years ago I had a client who ended up in a bit of a pickle because they had been gifted this gorgeous bougie overseas holiday it was to a very big theme park in the US and that would be so fancy. You go, gee, do you want to go to the theme park for free? But tax time came, the ATO knocked on their door and said, hey, we saw you did your tax, but we didn't see that trip that we saw on your Instagram. Could you let us know how much it was worth? Because you have to pay the tax

component of that. That's insane. Yes. So it is very complex when it comes to gifts. If your parents want to give you money and stuff like that, let's strip it back to non-influencer life. no gift money doesn't form part of your accessible income so you don't have to declare it regardless of the amount whether it was a dollar or five million dollars you don't have to do that however if it is something that was used to generate income that is where tax does come into it and that's where influencers actually need to be kind of careful obviously this is very niche content but if you even if you're a baby content creator like you need to be making sure that if you're agreeing for a sponsorship with a company or a paid collaboration, if they're

just gifting you products, they need to take care of the tax component of that because it shouldn't be on you to like take their product, post about it and then at tax time have to pay. Like that's a lot. The other thing as well to remember guys is that we do need to be paying tax on our investments and we did a whole episode on that. Listen back to our reporting season ep if you haven't already. June is always so dense when it comes to content. Sorry, not sorry. Let's have some like fluffy July episodes for them. We'll plan those later. Absolutely. Absolutely. All right, Vy, when is the right time to put our tax in the hands of the professionals versus just doing it ourselves? When you feel comfortable to do so. I think there is a very good reason why

more than 75% of Australians actually use a tax agent to do their tax returns. And that's because tax is arguably not very simple. If you don't know exactly what you can claim, you actually might be missing out on some sweet returns. And if you do get it wrong, you could be in for some pretty hefty fines. So, from my perspective, it does pay to talk to somebody who knows what they're talking about when it comes to tax. It's also just really important to feel empowered through that process. I know it can be expensive, but don't forget that, you know, if you're paying somebody $250 to do your tax return, that $250 next year can be claimed. So, it's not as big of a cost as you might think it is. But also usually an accountant's probably going to be

able to find $250 worth of claims for you that you probably weren't able to find yourself if I'm being honest. Yeah, so it pays for itself. Yeah, like hopefully. And basically the only way to get definitive tax return advice is from a registered professional. Like you can't just jump on the ATO website and read all their blog articles and be like, yep, cool. I read that guys. That's why I claimed it. Like a tax professional is going to actually be able to put you in the best possible position. Before we head, V, was there anything else we should keep in mind? Yes, my friend. So you know how I said, obviously, June 30, you can't lodge it on the day if you don't have your group certificates. There is actually a date that you need to be aware of,

and that is the 31st of October. You need to lodge your tax returns before then. You might be able to be eligible for an extension beyond that date if you are registered with a tax accountant by the 31st of October. But if you aren't registered and you haven't done your tax, you might be up for and penalties, which is not very good. I would factor in about two weeks for your tax return to come through. And the other thing is don't pester your tax accountant when it's actually gone through. They can't tell you the progress. There's no progress updating. There's no like logging into the ATO portal to see status. Like it will just be done when it's done. So I'm just quick shout out for the accountants in our community who are probably sick of people, you know, two days after

their tax return has been lodged to be asked, oh my God, gee, where's it at? They don't know. they don't know they can't see it sorry sorry and then also COVID-19 is not going to change those dates so it's just standard procedure for lodging tax returns this year so moral of the story paying tax is a privilege don't pay tax is a sick privilege yeah like let's change our mindset around this I've said it a million times on the podcast like how lucky are we to live in a country where we have access to absolutely everything that we have access to and the support we have access to. And that's what tax affords us. Like, it's sick. I think it's great. So, V, you said earlier, don't stress if you haven't lodged your tax because you won't go

to jail. It might all even out. We're not going to go to jail. The ATO is going to come down on me for saying that as well, because you should have done it by the 31st of October, obviously. You could be up for some penalties. When you say penalties, what does that mean? Fines. Money. Hefty fines? Look, they can be hefty. Depends how much tax you've avoided, my friend. Okay. But at the end of the day, I don't want you to be stressing if you haven't done it. I just want you to pull your finger out and get it done this year. We say the 31st of October because that's the date that after that date, you'll start to get penalties and the ATO might chase you for doing that. And like people have gotten letters before for, you know, not

lodging their tax, but I would just be trying to do it by that date, getting it done. And if you haven't done your tax from last year, just maybe pulling your finger out and speaking to an accountant because they are going to be the ones that are going to put you in the best possible position to avoid having any penalties to actually pay on that because they'll go look we're just organizing it for them perfect easy easy all right easy peasy well let's wrap the even more boring but important stuff that's the way all righty guys remember that the advice shared on she's on the money is general in nature and does not consider your individual circumstances she's on the money exists purely for educational purposes and should not be relied upon to make

an investment or a financial decision or a tax one don't do that and we promise victoria divine and She's On The Money are authorised representatives of InFocus Securities Australia, Proprietary Limited, ABN 47097797049, AFSL 236523. Oh, she's legit. Yeah, she's legit. If you would like to join our Facebook group

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