Admit it. You'd rather have a root canal at the dentist than work on your tax returns. Most people seem to have an amount of trepidation whenever that all-important date approaches each year, but they really shouldn't worry so much if they handle their returns carefully. Nevertheless, a lot of people make similar mistakes each and every year, when filling in their returns. Are you one of them? What do you need to be on the lookout for, if you want to avoid any potential problems?
How to Avoid a Red Flag
The Australian Tax Office is becoming ever more sophisticated as each year goes by, with regard to uncovering mistakes, or potential fraud. They use new technology that automatically analyses each return against a wealth of information stored in a database. They'll be looking to compare your return to others who are in similar occupations to you, to see if your return is normal, or if it automatically pops up a red flag.
One of the best ways to try and avoid this is to make sure that the deductions that you make are accurate and never guessed or estimated. In particular, ensure that the figures you enter match the amounts that were taken from your salary or wage, or can be correlated against tax that you have already paid during the course of the year.
Treating Overseas Income and Asset
Don't forget to include income that you derive from work overseas. More Australians have some interests beyond the country's shores and they are, of course, liable to pay their fair share of tax on this. Remember to include capital gains tax if you have assets overseas, as well.
This may include a property that you use when you go on holiday, or even a secondary residence. Strict rules apply here, especially if you do not make the property available for rent during the time when its vacant. In this case, you can't claim deductions across the board. You need to adjust your deductions, so that they only relate to weeks that are "on the market."
Keeping Those Bits of Paper
There's a good reason for keeping up with your bookkeeping on a regular basis, as you're unlikely to forget the appropriate details if you do. Many people just let it go and then they may find that they don't have paperwork to prove some of the expenses they want to claim. Remember, the ATO can require you to furnish them in the future and if you can't, you may have to repay the difference against what you have claimed. This may include interest and penalties, as well.
Getting Professional Help
To help keep you on the right side of the ATO, it's a good idea to have an accountant, especially when it comes close to tax time.Share