6 Tax Mistakes You Must Avoid
As tax time 2019 kicks off, here are the six most common issues identified by the ATO.
#1 – Leaving out some of your income
Taxpayers often forget about a temporary job or money earned from the sharing economy. Ensure you declare all income up front as part of your annual tax return.
#2 – Claiming deductions for personal expenses
Many taxpayers claim deductions for personal expenses, which are not tax deductible, this includes home to work travel, normal clothes or personal phone calls.
#3 – Forgetting to keep receipts or records your expenses
It is important to keep a record and receipts of your transactions for all items claimed. There is a helpful tool called myDeductions in the ATO app. Just take a photo, record a few details and then at the end of the year pass these on to your STS accountant and we ensure these items are claimed.
#4 – Claiming for something you’ve never paid for
Often people think everyone is entitled to a “standard deduction”. This is not the case. Ensure you only claim for legitimate deductions.
#5- Claiming personal expenses for rental properties
You cannot claim deductions for the times when you are using an investment property yourself
#6 Claiming interest on loans used to buy personal assets
You can’t claim interest on a personal loan, for items purchased such as a car or boat.
It is important to remember 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.
Around half of the adjustments the ATO make are because the taxpayer has no records, or they were of poor quality. So keeping records is of utmost importance.
For further information on what you can and can’t claim and for full help on your Tax Return this year, don’t hesitate to contact our team of expert accountants and business advisors at STS today.
