As the year comes to a close and the financial year moves forward at full-steam, it’s important to be on top of your tax time practices now to prevent heartbreak later.
The ATO have profiled the five most common mistakes Australians are making during the end of the financial year period:
- Leaving out some of their income (for example, money earned from cryptocurrency etc.)
- Claiming deductions for personal expenses (for example, between work travel, personal phone calls etc.)
- 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)
- Claiming for something they never paid for
- 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)
If you are worried about what you can claim for work-related personal expenses, just remember these three golden rules:
- You must have spent the money yourself and not have been reimbursed
- It must be directly related to earning your income
- You must have a record to prove it
With ATO efforts to crack-down on tax time cheats increasing, it’s more important than ever to ensure you don’t get caught off-guard when June 30 comes around.
If you are worried about any of these, don’t hesitate to get in contact with us! Especially if you are worried about ensuring you are on top of your receipts over the year. Through utilising apps such as ReceiptBank with Xero you can streamline your business and won’t have to worry about storing receipts ever again!