3 Tax Return Mistakes You Should Avoid At All Costs…
Lodging an accurate and correct tax return is a must.
That’s a fact unless you want to be in a hot water with the Australian Taxation Office (ATO).
Lack of evidence, receipts and “guesstimates” will not go unnoticed under the eyes of these trained professionals.
Each year ATO work hard to spot problems in your tax returns.
You can save them and yourself from that trouble by avoiding these mistakes.
1. No Proof of Purchase.
You should know that without your receipts for your expenses, the maximum claim for work-related expenses you can get is only $300.
There’s a good chance you’re already eligible for the $300, which can definitely boost your tax refund.
However, without the receipts, it will be your words against theirs.
No proof, no claim, it’s as simple as that.
Thus, it is crucial that you keep all your receipts and keep track of your records year-round, so you don’t miss out at tax time.
Note that, if you over-claim receive a refund more than you are entitled to, the ATO can definitely penalise you to repay the difference, including interest charges, along with other penalties.
Should you have any questions regarding particular expenses or deductions you would like to claim, feel free to contact and ask for the services of an accounting firm or an accountant you know for their expert advice.
At least this way, you can get the best refund possible, while also ensuring you lodged the correct tax return.
2. Not Declaring Overseas Income.
It is extremely easy to forget about your Australian tax responsibilities when you work and live outside the country for a period of time.
Many even think they don’t need to lodge a tax return in Australia.
Well, it’s time to clarify the confusion: if you’re an Australian resident for tax purposes, you definitely should lodge a tax return in Australia every year when you live and work outside the country.
Thus, you have to declare all of your foreign employment income, as well as other income you have received while working overseas.
The list of income includes:
• Employment income
• Business income
• Annuities and pensions
• Investment income
• Capital gains on overseas assets
3. “Guestimating” Tax Deductions.
Inaccuracy is probably the most common problem ATO officials spot in tax return forms.
Ensuring you put accurate figures in your income, deductions and amount of paid tax in your tax return is extremely important.
The ATO has the records of your paid taxes so you can compare what you have submitted against the information they already have.
Make sure your entries are complete and correct.
A few inaccuracies and out of place numbers can raise automatic red flags for ATO’s attention.
The best way to do this is to wait until you receive your official PAYG summary before you start completing your tax return form.
Also, make sure you enter the right amounts from your receipts to your deduction claims.