The biggest tax return mistake - just taking a guess!
Would you believe that the biggest mistake the tax office reports that people make with their tax return is taking a ‘close enough is good enough’ approach?
When you file your tax return, you need to have all the proper documentation to back up your claim.
Proper documentation includes:
Your PAYG Summary (old ‘Group Certificate’) – for any or all jobs that for which you paid tax during the financial year;
Proof/ a statement that confirms that you have paid health insurance (this will be provided by your insurer);
Tax receipts for all purchases – while you are not required to provide receipts for expenses under $10, it is always good practice to keep all of your receipts. All those small, pesky expenses could add up to quite a large amount of money!
A record of all the invoices your business has issued and their payment;
Motor Vehicle records – particularly log books.
Receipts for charitable donations – these can be claimed as a deduction.
As we have stated in earlier blog posts, this year the tax office is getting tough on tax evasion. Even if you have made an honest mistake – or a ‘guesstimate’, the tax office will see any mistakes that result in your gain as wilful tax evasion.
There are many ways to ensure that your tax return is accurate and to ensure that you do not come up on the ATO radar.
You can keep your income and expense details in a spreadsheet, or for small and medium businesses you can use programs such as Xero and MYOB. You need to ensure that you are vigilant and that your records are accurate.
Working with a registered tax practitioner can help ensure that you get the very best return you can, while not overstepping the lines of the law.
You should also note that there are millions of Australians in a similar position to you at this tax time – all are trying to get the correct information and get their financial records in order… unfortunately, the ATO website has not managed to keep up with the increased traffic and you will often find it is slow, cannot find the information you seek or offline completely.
Information from the tax office can often be hard to find and confusing – it is easy to make a mistake. Claiming your tax can be like working your way through a particularly difficult and detailed maze.
For instance, did you know that if you engage in some form of work related self-education (such as an online course), you could be eligible to claim some internet usage, phone calls relating to the course, any equipment you purchase to meet the requirements of the course (such as stationery and computer consumables and even equipment repairs)? You could be missing out on money that the tax office should be paying you!
So while it is a good idea to see a tax accountant to ensure that you do not accidentally claim things that you are not entitled to claim on your tax return, your accountant can also ensure that you claim all those things that you may not have known you are able to claim – so you might find that your return from the tax office could be a lot healthier than your current expectations.
I am sure I have said this before – it is a jungle out there, contact Think Accountants to help guide you through the treacheries of tax time.