Australia tax time, ATO: Experts reveal how to avoid common tax mistakes

With the end of the financial year fast approaching, an expert reveals some of the common mistakes Australians make when preparing their tax returns and how to avoid them.

Too many Australians make mistakes on their tax returns, says Gavan Ord, spokesman for CPA Australia, Australia’s leading professional accountancy body.

“Getting it wrong can result in delays in receiving your refund, extra work to get it right, unnecessary stress and potentially even penalties,” Mr Ord said.

Take your time:

CPA Australia recommends that you wait until the information pre-filled by the ATO on your tax return is complete before filing it.

This is usually done by the end of July, but can take until mid-August.

Before submitting your return, CPA Australia also recommends checking that your employer’s year-end profit and loss statement is “tax ready” and that information about your private health insurance, dividends and interest is available.

Otherwise, your return may include incomplete information, which may require you to amend your return and pay additional tax.

Mr Ord said it was possible that cost-of-living pressures meant people were keener than usual to access their tax returns this year.

“We understand it’s tempting to file your return straight away, but you should wait until the ATO has completed pre-filling your tax information,” Mr Ord said.

“This can take several weeks or more and many who sign up in early July end up having to change their predictions later, so it’s best to wait.

“It will save you in the long run.”

Have the necessary proofs:

According to CPA Australia, it is “fundamental” that you have the necessary evidence to support what is on your tax return.

“All deductions require proof of claim,” said Mr. Ord.

“Many of us have been working from home more often, but remember that you will still need to provide evidence to prove the eligibility of your work-related claims.

“You’ll need a diary for every day you’ve worked from home and you’ll have copies of your receipts and receipts.”

Make sure you’re asking for what you’re entitled to:

People often don’t realize they can claim things like donations to charities, work-related education and training and even sunglasses if you have to wear them at work, Mr Ord said.

“Subscriptions, union and membership fees are all tax-deductible if they are for work – remember you can’t claim them as a deduction if your work pays for them,” Mr Ord said.

“Not claiming everything you’re entitled to means less money back at tax time.

“This is because people are rushing through their installation just to get it done and fixed, maybe they haven’t kept the right records or they don’t have a proper understanding of what they are entitled to.”

Get help from an expert:

An expert can help you avoid mistakes and claim the maximum tax relief you’re entitled to.

“The more complex your earning activities and finances, the more you should consider professional advice,” Mr Ord said.

“For example, if you receive rental income or have bought and sold cryptocurrency, consider talking to a tax agent.

“It is also important to remember that the fee you pay to a chartered accountant to complete your tax return is itself tax deductible. That’s winning.”

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