Will you find yourself in the ATO spotlight?
It’s not very hard to understand that how important to lodge an accurate tax return so you can avoid encountering trouble with the ATO. Overestimated or “guesstimate” expense claims, lack of evidence and receipts, will really very hard to unnoticed. We describe below the four most common tax return mistakes: Get out of it and there’s very rare chance you will be walking forward the ATO’s tax audit trail.
Our top 4 common tax return mistakes are:
- Estimating or predicting tax deductions
You make sure use accurate figures when you enter your deductions, income and the amount of your tax return. The ATO has all the records of tax paid they might match up what you submit the data they already have.
One of the common tax return mistakes is an Inaccuracy but it shouldn’t be avoided always. Whatever entries you entered must be faultless and complete. Just add few dollars
Inaccuracy is a common tax return mistake but one that should always be avoided. All your entries must be precise and complete. Just a few dollars out of place can trigger the ATO’s attention.
- Meet with disaster to declare overseas income.
If you are live or work overseas for a period of time and forget to pay tax is an easy thing, but you’re not the only one doing this thing lot many people do. Few of them are simply think no need to lodge a return here.
Let me clear this thing to all of you, If you are an Australian citizen or resident for tax purposes, you have to lodge your annual tax return in Australia when living and working overseas. You need to disclose all your overseas employment income and other Income also which received by you from that country.
Overseas income includes:
- Business Income
- Capital Gains On Overseas Assets
- Pensions And Annuities
- Investment Income
- Employment Income
If you are working overseas and don’t know about tax rules, ATO provides wonderful information for Australian taxpayers who work overseas and live in Australia: Click Here
- Claiming for holiday and residential rental properties too much
One of the most common mistake in tax return related to residential rental properties and holidays are generally because very tough rules applied at the time of tax deduction. You have to know when you can claim and when you can’t for the property related expenses. If you go for a holiday or own any residential property so note down following steps. You can’t claim all the expenses.
Holiday rental properties:
- Don’t forget that if holiday rental property is not available genuinely for rent so, you can’t claim it for deduction.
- If your holiday rental property is available for rent for such particular part of the year or some specific period so, you have to adjust your deduction based on that period of the year the property on rent. To do that thing your PND Accountants can help you.
- If your spouse and you own a property, divide the expenses encountered equally between both tax returns. You can define your percentage of ownership in the property at the time of online tax return. By declaring the property this way you should claim only your part of claims and figures for that particular property and this rules also applied for your residential properties.
Residential rental properties:
- Whatever income you earn from your property that you must declare each financial year.
- Expenses you can claim for your property for the period it’s available for rent. Also, previously make any kind of expenses related to the property for being rented very first time can’t be claimed.
- You can’t claim the cost of renovations and capital works directly. These kinds of claim can be count at 2.5% of the total cost each year for 40 years.
- No Valid Information or proof of purchase
Keep your receipts of your expenses, because without a receipt you can’t claim more than $300 expenses related to work.
There are chances to claim more than $300, which can help to increase your tax refund quite well. After all, without receipts your words only against ATO. The ATO says very clearly No Proof, No Claim, So It’s better to keep your receipts for that particular year. We understand it’s quite typical to maintain all records and track down all of your receipts
However, with no receipts, it’s your word against theirs. The ATO says, no proof, no claim, so keep your receipts year-round. It is critical that you keep good records and track all your receipts round the year. But If you save your money and get a refund of your tax so keep it as long as possible.
This is the common mistakes should be avoided and if you still stuck in your tax return so contact PND Accountants in Melbourne. We, PND Accountants make you stress-free and save you from the Tax Monster.
