If you own a business in Australia, you have to lodge your tax return by the deadline set by the Australian Taxation Office (ATO). The ATO will check all the details, and if satisfied, you will get your money back. In 2021, it was reported that Australians would receive an approximate amount of $2820 at the end of the financial year. Unfortunately, people make vital mistakes, which lead to heavy ATO penalties for incorrect tax returns. This blog points out some valuable tips you must follow to avoid common tax return mistakes.
One of the crucial mistakes people often make is that they forget about their earnings from any part-time employment. Various part-time jobs are available in Australia, like pet sitting, babysitting, childcare jobs, and other freelance jobs. If you have done any of these while being employed in a full-time position, it will be important to mention all of them in your tax return.
For convenience, you may consult a professional business tax accountant to get the correct guidance on how to proceed.
As a business owner, you must know what you can lodge as tax deductions. For example, you may think you can claim costs associated with covering the distance between your home and work. But, you can claim the costs incurred while travelling from your office to any other place of commitment. The reason is that according to the ATO, the time you spend going to your office and returning to your home are outside the work hours, and thus the associated costs will be considered personal.
You must keep all the documentary evidence of the claimed expenses safely. Keep it for a maximum of five years from the date of lodging the tax return. The reason is that you may receive a call from the ATO anytime, and if you cannot show appropriate evidence, you may face trouble.
Documentary evidence includes paperwork related to work expenses, rental property income, bank interest statements, etc. You may arrange them in a folder and keep the folder in a safe drawer. If you want to store them digitally, you may use accounting platforms like myDeductions. Hnry is another platform that suits the requirements of a contractor or self-employed individual.
Many times, it has been found that people try to claim for items and services they did not actually pay for, which may include dry cleaning. It happens because they think they are subject to a ‘standard deduction.’ Be careful about it as it may lead to an audit.
Consult with your business advisor Perth for valuable guidance.
You may have a property to rent out to tenants. In that case, you have to include the rental income in your tax return. You have to include the expenses you have to bear for providing basic amenities for the tenants. However, you will not be able to claim the money you had to bear while staying there for a few months.
If you have made mistakes and want to know how to amend your tax return lodged with the ATO; you may take help from an accountant. Through your myGov account, you can do it online. Alternatively, you can go for offline processes, too, like filling out the relevant amendment form or sending a letter. Having an accountant by your side means you can get the necessary guidance. To hire such a professional, you may contact Palladium anytime.