ATO guide to the 5 most common Tax Time mistakes
It’s often-simple mistakes and misunderstandings that trip people up. “While we know most people want to get it right, our audits and reviews show that there are five main areas where taxpayers are most likely to get it wrong.”
The top five mistakes include taxpayers who are:
- leaving out some of their income – maybe forgetting a temp job or money earned from the sharing economy
- claiming deductions for personal expenses – home to work travel, normal clothes or personal phonecalls
- forgetting to keep receipts or records of their expenses
- claiming for something they never paid for – often because they think everyone is entitled to a ‘standard deduction’
- claiming personal expenses for rental properties – either claiming deductions for times when they are using their property themselves or are claiming interest on loans used to buy personal assets like a car or boat.
ATO Assistant Commissioner Kath Anderson reiterated the three ‘golden rules’ for work-related expenses: “You must have spent the money yourself and not have been reimbursed, it must be directly related to earning your income, and you must have a record to prove it.”
Tax can sometimes be tricky, but it’s not tricky to keep good records.
Another tip is to include all your income. “A temp job, cash jobs, capital gains on cryptocurrency, or money earned from the sharing economy is all income that must be declared. We are constantly improving our data matching tools and even a one-off payment may be enough to raise a red flag.
“We know some people lodge early because they want their refund, and that’s fair enough. But we amend returns for thousands of taxpayers that leave out some of their income. This can delay your refund or even see you owing money to the ATO. If you wait until mid-August, we will have pre-filled most of your income information for you, to help you get it right to start with.”
Pre-fill is available whether you choose to lodge online with myTax, or with a registered tax agent.
Skybridge Financial offers free consultations to all tax return clients, providing advice and support on life insurance, superannuation, financial planning and more.