The end of the financial year is on the way! Hence loads of questions might be thriving inside you. Especially, after COVID-19 restrictions, what changes have been made in tax, is undoubtedly a critical point to note.
Already, the Australian Tax Office has brought loads of changes to make things easier. But that doesn’t mean that people forget the essential rules that apply to each taxpayer. Often, people make these five silly mistakes while filing the tax return. So, what are these? Let’s have a look at the points stated below.
Most of the time, people never declare their entire income. According to the Australian Tax Office, it’s the most common mistake that people make. ATO wants that a taxpayer must declare every income from a regular job to temporary job during tax return. Even cash-in-hand, money earned from Cryptocurrency like Bitcoin, capital gains, etc. should be mentioned.
Claiming a deduction for things while being ineligible
ATO has three golden rules and wants people to follow the same while claiming the deduction.
- The things you want a claim on must be a part of the income generation process.
- Similarly, it should not be reimbursed instead of bought by the worker.
- A well-maintained record of the things on which you’re aspiring claim deduction
It’s essential to clear because most of the people also include the personal cost that isn’t a part of operational cost. In short, if traveling in your own car during working hours is a part of your job, then you can claim the deduction. Besides, most of the people also include laundry expenses for deduction without knowing the policy behind it.
Forgetting to keep receipts
It’s one of the essential things that every taxpayer must bear in mind. For instance,-most of the time, people either throw the receipts elsewhere or forget to take. Hence, the best practice that you must employ is getting both soft copy and hard copy for the receipt. For instance- you can ask authorities to send an email receipt and printed receipt for better assurance. However, you can also take the help of ATO’s My deduction app.
Claiming for non-paid deductions
If you haven’t paid money for work-related expenses from your own, then you can’t claim for deduction. Therefore, if it is reimbursed, then you aren’t eligible for claiming.
If you don’t want a red flag from the tax office to raise in your record, never put additional effort to claim for non-rented property expenses. Moreover, you can only claim the deduction if, during the pandemic, your property was genuinely available for rent or rented.
For every taxpayer, it’s essential to follow the guidelines. Otherwise breaking the rules of ATO is undoubtedly going to put you into big trouble.