When we say that it pays to spend a little time and effort ensuring you’ve got every detail of your tax return right each year, it isn’t ground-breaking information.
However, there are still a number of common tax traps that seem to catch people out.
Below, we break down our key tips for ensuring you feel confident and capable this tax time.
Claim only what you’re entitled to
You’re entitled to claim a deduction for any expense which you incurred in earning your income. With reasonable proof, some of the common work-related expenses taxpayers claim are:
- The cost of using your own car for work, outside of travelling to and from
- The cost of travelling for work
- The cost of tools and other equipment required to do your job
The key is to not embellish deductions, and to only claim on costs you can prove by producing a receipt, invoice or bank statement. If you are required to work away from the office or home, the costs you incur are deductible up to what you spent only. If you purchase new tools or a laptop, items of that kind are deductible in full up to $300, and deductible progressively over several years should they cost more than that.
Self-lodgers using the ATO’s myTax program are monitored as they prepare their return by the ATO’s computer systems to ensure they’re not over-claiming. The ATO’s computer systems compare your claims to those of others like you, so inflating your deductions will likely come back to bite you down the track.
A good accountant will be able to help you with this, minimising the chances of an audit at a later date.
Don’t rely on pre-filled data
As with many online forms and applications, with the push of a button you can now pre-fill lots of your income information straight from the ATO’s systems. Take care, though – it’s much wiser to use your own information as the key source data rather than relying on the ATO to have it exactly right. This means providing your own payment summaries and the like.
As the legal burden of proof and accurate information falls on you, if it turns out you have omitted information and the ATO comes knocking, it will be your burden to bear.
Don’t forget the basics
It may sound simple, but you’d be surprised how many tax returns are held up each year because of basic mistakes.
If you’ve changed your name or address, make sure the ATO is aware or they won’t be able to match your lodgement with your Tax File Number.
Even something as simple as a spelling or autocorrect mistake has the potential to slow things down, so keep an eye on your typing.
It’s also important to remember to submit your banking details as the ATO no longer sends out refund cheques.
Seek the assistance of a qualified accountant
At the end of the day, tax is difficult. Get it wrong, and the consequences sit solely with you.
Passing your information onto a tax accountant will give you peace of mind and may even help you to claim some of the more obscure deductions you may not have known you were eligible for.