Don't make these mistakes at tax time!

These days, your tax return is almost like an honesty test. From Centrelink payments to health insurance, child support to bank interest, the ATO sees all and seemingly knows all.

This is because of the amount of information that is provided to them through data-matching platforms, new technologies and greater access granted each year.

One thing they don’t have access to though is your tax deductions.

It’s important to lodge an accurate tax return so you can avoid getting into hot water with the ATO. Exaggerated or “guesstimated” expense claims, or a lack of receipts and evidence, will often be flagged for investigation at the ATO.

Avoid these common mistakes involving your tax return, and you’ll be far less likely to raise a red flag with the ATO.

Do NOT Guess Or Estimate Your Income & Tax Paid

On your tax return, ensure you use accurate figures when you enter your income and the amount of tax you’ve paid.

The ATO has records of this, and they compare what you submit against the information they already have. They might not have records of some types of income like consulting or solo work, but they can see your accounts.

All of your entries must be correct and complete as out-of-place money can attract the ATO’s attention

Do NOT Guess Or Estimate Your Tax Deductions

Deductions are something only you can keep track of.

Don’t be “creative” with tax deductions, as the ATO analyses every item you claim. They then compare your deductions against others in your line of work, location, industry, age group, and their own benchmarks.

If your deductions look too high for the ATO, watch out!

It’s also best to have a receipt sorted for these deductions as the ATO has a knack for asking about them.

Save receipts into a folder on your computer, a shoebox, or on your phone – and save the receipts right when you make a purchase so you don’t have to hunt for them later.
Enter the exact amounts from your receipts into your tax return.
Tax agents know what the ATO is looking at and know exactly what is allowed in your deductions.

Consult us about your return if you have doubts.

Do NOT Fail To Declare Overseas Income

If you are an Australian resident for tax purposes (which is more complicated than just being here), you should still lodge an annual tax return in Australia even if you live and work overseas at the moment. You need to declare all your foreign employment income AND any other income you receive from that country.

Foreign income includes;

pensions and annuities
employment income
investment income
business income
capital gains on overseas assets

Do NOT Overclaim Expenses For A Rental Property Or Holiday Rental Property

There are strict rules applied to when you can and cannot claim tax deductions for the property-related expenses over the year - not all expenses can be claimed!

Do NOT Fail To Have Proof Of Purchase For Deductions

Paying money for work-related items and keeping no receipt is a costly mistake that many people make.

Basically, without receipts for your expenses, you can only claim up to a maximum of $300 worth of work-related expenses. But even then, it’s not just a “free” tax deduction. The ATO doesn’t like that. It has to be real expenses.

Remember: If you over-claim your deductions and get a bigger tax refund than you’re entitled to, the ATO can ask you to repay some or all of your refund – plus interest charges and other possible penalties as well. That also goes for claiming significant deductions that you can’t prove.

< Older Post Newer Post >

Farewell Deryn

By Jodie Cunningham • 08 Sep, 2023

Deryn worked for Logan & Hall for over 32 years. She was originally employed in an administration role which she continued to do until she left in 1984 to start her family having children Jane and then David. Deryn returned to Logan & Hall in around 1990 as the Office Manager where she also completed some accounting courses. Deryn eventually went onto managing all the office Self-Managed Super Funds including preparation and lodgement of these returns. During her time at Logan & Hall, Deryn built strong relationships with her clients and will be missed by them we’re sure. Outside of work, Deryn is also well known in the Swan Hill Community with her involvement with the Swan Hill Show and Swan Hill Women in Racing. Deryn could also be found on the golf course. You may have even shared a glass or two of bubbles with Deryn along the way. We treasure the many years we have had with Deryn both at work and personally. She will be missed around the workplace, but we will be keeping in touch. Deep will now be managing the Self-Managed Super Funds and can take care of any queries you may have.

2023-24 Federal Budget Announcements

By Jodie Cunningham • 02 Jun, 2023

The Federal Budget was handed down on the 9 May, 2023, outlining a number of changes that impact businesses, tax & superannuation.

Offsetting Business Losses in the Current Year

By Jodie Cunningham • 05 Apr, 2023

A non-commercial business loss is a loss you incur, either as a sole trader or in partnership, from a business activity unrelated to you primary source of income. This type of business activity could be a hobby or lifestyle benefit.