Don’t rush your tax return

The end of the financial year is a busy time for many, but local tax experts warn not to rush your tax return.

Earnt Accounting & Bookkeeping in Armidale, Director Angus Gasbarri, is urging people to take the time to consider their individual circumstances and make sure their claims are complete and legitimate.

“Taxpayers should gather their evidence of work-related expenses over the next few weeks and wait for the ATO to pre-fill their information before lodging,” Mr Gabarri said.

“Waiting for complete and correct ATO prefill data is particularly important for those working within small businesses – End of Financial Year is a busy time for your employer and their accountant, and finalization of income statements often doesn’t occur until mid to late July.”

“If your pay package includes irregular components such as bonuses/commissions, travel or vehicle allowances, or salary sacrifice arrangements, it’s worth cross-checking the ATO’s pre-fill figures against your own records, as mistakes can and do happen.”

He said for those with investments in managed funds or similar products, investor tax statements are typically not issued until August or September. Lodging too early may mean needing to amend your return later.

“Some may believe that the earlier you lodge a return, the sooner you get a refund but that isn’t necessarily true,” Mr Gasbarri said.

“It’s important to consider which out-of-pocket work-related expenses could be tax deductible, but you’ll need evidence in case you are audited.”

“Receipts are essential and hopefully they’re in computer files or emails – not lost down the back of the couch!”

“File emails throughout the year or add a photo album to your smartphone for your tax receipts.”

Australia’s largest accounting body, CPA Australia says thousands of taxpayers miss out on legitimate claims every year because they’re in a hurry to lodge returns early.

CPA Australia’s Tax Lead Jenny Wong said many people don’t give enough thought to how their circumstances have changed over the past 12 months.

“Some people go into autopilot when they do their tax returns,” she said.

“They cut and paste from their last return and fail to consider any changes to their personal circumstances.

“Turn off the autopilot and take time to seriously consider what’s different about your expenses this year and think about what you could claim.

“Maybe you started a new job where you had to buy tools, subscriptions, or pay for training and security clearances, for example.”

The ATO has a comprehensive guide to industry and occupation types to help taxpayers work out what they can claim that is relevant to them.

Mr Gasbarri encourages local people to consider seeking professional advice with their returns, especially if they have complex finances and earning activities such as owning shares or rental properties.

“For taxpayers with simple tax affairs, minimal deductions, and a bit of time, lodging through myGov can be a straightforward and cost-effective option. I recommend this for some taxpayers. But for those with more complex situations – or limited time – it’s worth engaging an accountant,” he said.

“I was recently talking with a client who lodged early but had to amend later in the year resulting in a higher tax payable – you need to take care as the ATO will typically charge interest on the extra tax, calculated from the original due date. This is another reason to take the time getting it right the first time.”

For more information check the ATO website: https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/guide-to-self-assessment-for-indirect-taxes/amendments

Some of CPA Australia’s tips to help complete your tax return include:

• Consider your working from home expenses. You may be able to claim expenses such as internet costs and printing ink and paper, so long as they can be legitimately attributed to work use.

• Using your car for work? For vehicle expenses, you must be able to identify and justify the percentage you’re claiming as business use. It’s best to use a logbook or diary to show private versus business travel.

• Consider buying your essentials now. You still have until June 30 to purchase essential work items and claim the deduction this tax time.

The CPA reminds taxpayers not to exaggerate work-related claims.

Ms Wong said “Getting your tax return right is your responsibility.  This means declaring all your income and claiming the appropriate expenses.