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ATO guide to the 5 most common Tax Time mistakes

As Tax Time 2018 has ‘kicked off’, the ATO has profiled the five most common mistakes they see, including taxpayers who are:

  1. leaving out some of their income (e.g., forgetting a temp or cash job, capital gains on cryptocurrency, or money earned from the sharing economy);
  2. claiming deductions for personal expenses (e.g., home to work travel, normal clothes or personal phone calls);
  3. forgetting to keep receipts or records of their expenses (around half of the adjustments the ATO makes are because the taxpayer had no records, or they were poor quality);
  4. claiming for something they never paid for – often because they think everyone is entitled to a ‘standard deduction’; and
  5. claiming personal expenses for rental properties – either claiming deductions for times when they are using their property themselves, or 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.”

The message from the ATO is clear. They get a lot of information from third parties and they have already started to crack down on the taxpayers that they think may not be doing the right thing.

While we want to ensure that you don’t miss out on any claim you are entitled to, we also ensure you stay out of trouble!

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