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- Income tax
Why you should wait before filing your tax return
By John Collett
The Tax Office has warned taxpayers not to rush to get their tax returns lodged, as filing early could risk making mistakes with pre-filled information from employers, banks, government agencies and health funds that are usually not completed until late July.
Australian Taxation Office (ATO) assistant commissioner Rob Thomson says the ATO witnesses many mistakes by those who hurry to lodge their returns early.
ATO assistant commissioner Rob Thomson says you should not rush to get your tax return, but take time to get it right.
You can check if your employer has marked your income statement as “tax ready” and if your pre-fill is available in myTax before you lodge, he says.
“Once the information we collect is available, all you need to do is check it and add anything that’s missing,” Thomson says. The ATO has sophisticated tools for cross-checking compliance with the tax law.
Mark Chapman, the director of tax communication at H&R Block, says compliance hotspots for the ATO include work-related expenses, rental property income and deductions, as well as money earned on the side.
The ATO has long identified work-related expenses as a big part of the “tax gap” – the tax that individuals are expected to pay and the tax they actually pay.
Taxpayers need to be careful with claiming working-from-home expenses. The 67 cents per hour fixed rate covers the total running expenses for electricity, gas, internet, mobile and home telephone, plus incidentals such as stationery and computer consumables.
There is no need to have a dedicated home office. You can do your work from the couch or balcony. Taxpayers can still use the actual cost method. That may be better for those who claim particularly high working-from-home expenses, Chapman says.
Another focus for the ATO this tax time is on those who claim excessive deductions on investment properties, such as excessive interest expense claims.
That includes incorrect apportionment of rental income and expenses between owners, such as where deductions on a jointly owned property are claimed by the owner with the higher taxable income, rather than jointly.
Chapman says you should be careful if you have received income through Uber, Airtasker or any other sharing-economy platform.
The ATO is now receiving reports from many sharing economy platforms, which it can use to match the income declared in tax returns, Chapman says.
Those with cryptocurrencies, like bitcoin, will need to declare any profits for the purposes of capital gains tax, Chapman says. The ATO is collecting records from Australian cryptocurrency exchanges. Traders can have their profits from crypto taxed as business income, he says.
If you are lodging your own tax return, you need to do so by October 31. The ATO has a tax help program that is free to those earning $60,000 or less, where accredited volunteers will help them lodge their tax returns online.
If you use a registered tax agent, generally you have until May 15 of next year to lodge your return.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
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