While we all like getting something back on our tax return, no-one likes spending all day filling it out, or having to worry about making mistakes. That’s why the ATO is making completing your tax return as simple as possible, by creating a range of resources specific to different occupations. We are hoping that you will find some of the products below useful and will be able to share them with your networks.
Designed to publish on your website or display in staff rooms, this handy one-page poster outlines what you can and can’t claim at Tax Time.
These how-to guides describe what steps you need to take to correctly claim a range of common deductions. They are useful references to have on-hand not just during Tax Time but throughout the year, and help you keep good records when making work-related purchases.
To help people steer clear of any pitfalls, we’ve also included below some common mistakes we see on tax returns and how to avoid them. It’s important to remember that a taxpayer is always responsible for their own return, even if an agent does it for them, so it’s worth checking out the below tips.
I hope these resources will be useful for you and your networks. If you have any questions regarding deductions and work-related expenses, or any other tax or super-related queries, please feel free to get in touch with me.
Australian Taxation Office
The top four mistakes people make on their tax returns – are you making them too?
1. Claiming a deduction when you didn’t spend the money
Perhaps you’ve heard that you can claim $50 for work-related phone and internet expenses without written evidence? Or maybe you’ve been told you can claim up to $150 for laundry without having to keep records? While these statements are true, you must have actually spent the money. This is on the ATO’s radar, so if you’re audited you’ll need to show how your expenditure was calculated and prove it was directly related to earning your income.
You are responsible for the claims you make in your tax return, whether you prepare it yourself or use a tax agent, so make sure you can demonstrate you actually spent the money.
2. Claiming a deduction for private expenses
You can’t claim a deduction for a private expense. However, if you have an expense that has both a private and work-related component, you can claim the work-related portion. For example, if you use your personal mobile phone for work-related calls, you need to figure out the percentage that relates to your work use, and only claim a deduction for that portion.
3. Forgetting to declare all your income
Most people who forget to declare all their income in their tax return lodge before pre-fill is available in August. Pre-fill automatically inputs most of your information from your employers, financial institutions and government agencies. Just check the details are correct and add any missing information. If you’re lodging before pre-fill is available make sure you include all your income to avoid penalties.
4. Not having records to prove claims
You typically need to keep any documents relevant to your tax affairs for five years after you lodge your tax return. The ATO may ask you to substantiate your claims – even after your tax return is processed – and you could find yourself in hot water if you don’t have the records you need to back up your claims.
You must have evidence to prove your claims. The ATO has an app that lets you keep track of your work-related expenses on the go and then upload them to your tax return or tax agent at tax time. Check out ato.gov.au/myDeductions