The ATO has addressed the five most common mistakes and the people most likely to have a tax time troubles.
The top five mistakes include:
- Forgetting to declare some of the income: the taxpayer maybe forgetting a temporary job or money earned during the financial year.
- Claiming a deduction for personal expenses: for example home to work travel, normal clothing or personal phone bills.
- Forgetting to keep receipt: The taxpayer needs to keep receipts or records for five years from the date you lodge your tax return.
- Claiming for something they never paid for: The is a wrong concept is that taxpayer think everyone is entitled to a “standard deduction”
- Claiming personal expenses for rental properties: The taxpayer wrongly claiming the deductions for their residential home or claiming interest on loans to purchase personal assets like a car or boat.
The claim must be directly related to the earning income, and the taxpayers must have a record to prove it. In the 2018 tax time, ATO is paying close attention to claims for private expenses like home to work travel, plain clothes, and private phone calls. ATO will also be paying attention to people who are claiming standard deductions for expenses they never paid for.
ATO accepts the taxpayer to store the receipts electronically, it’s recommended the taxpayers to just take the photo on the receipts using the smartphone and store it under ATO apps or upload the information to the tax agent.
The taxpayers have to include all the income, including temporary job, cash jobs, capital gains on cryptocurrency, or money earned during the fiscal year must be declared. The ATO is constantly improving the data matching tools and even a one-off payment may be enough to raise a red flag.