Tax Tips

Below are some handy tips for your tax return, whether you have an accountant complete your return or you are a do it yourself person.  Keep the below Do’s and Do not’s in mind when completing your return. At the end of the day it is your return and the ATO will hold you accountable.

First the “ Do not’s”

1. Do not make claims for non-work related expenses. Getting back a bit of extra cash in your refund now will quickly be forgotten if you are caught by the ATO. The fees and penalties will be approx twice what you received for the deduction.
2. Do not leave out group certificates, especially ones from centre link, the ATO will know and will catch up with you.
3. Do not forget to declare capital gains on shares or rental properties. In regards to rental properties the ATO will match all properties sold against tax returns received. You will be caught 100% of the time, although it may take a couple of years before you receive the adjustment notice.
4. Do not forget to declare your bank interest again as above the ATO will cross check with the banks.
5. Do not forget details of any HECS debts of supplement loans, again the ATO know this and you will be charged anyway.
6. Do not listen to advice from anyone unless they are an accountant, many people look to their parents or friends for tax advice. Although they may tell you what you want to hear it is most likely incorrect. For the best advice speak to a CPA.
7. Do not think that because you used a tax agent, accountant or because you received your full refund that you have gotten away with not declaring some income or non-work expenses. The ATO has up to 5 years to audit your account and will do so.

Let take a look at the “Do’s”

1. Do claim all your work expenses, make sure that you have the necessary documents in place and consult an accountant should you not be clear if a claim is legitimate. Our tax system has many deductions which are claimable and it is your right to maximise your claims.
2. Make sure you claim all of the rebate to which you are entitled, including zone, spouse zone, children zone, medical expenses, seniors, pensioners, sole parent, Medicare, etc. Rebates are funds to which you are entitled as such you should make sure you receive them.
3. Seek professional advice is you are not 100% sure, generally the advice is worth what you pay for it.
4. Listen to the advice from an Accountant, sometimes it is not what you want to hear but they have your best interest in mind. Even the best accountants have had clients go through audits by the ATO. It is then, when you will be thankful you got the right advice.
5. Make sure you keep copies of your returns and receipts for at least 5 years. If the ATO does audit you then you will need this to prove your claims.

Keep in mind that our system of taxation is a self assessment system which means that the ATO takes no responsibility for making sure that your tax return is correct. So if you have made a mistake or a claim which you were not entitled to then this may not show up for a number of years.

Making a mistake can be costly when doing your own tax return.  As a general rule if the mistake means you will receive an extra $100 in your return, when corrected the fine and penalties from the ATO will be approx $200.  So be careful and if you are unsure seek out professional advice.

Jason Fittler