RA Business Advisors

tax return

How Much Documentation Do You Really Need For a Tax Return?

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Tax time article headerTax time is one of the few times of the year where keeping an absurd amount of paper in your possession is socially acceptable. But while most of us can confide in our receipts to keep us safe navigating our tax return, receipts aren’t always enough – especially if you get audited by the ATO. 

As one such Australian told the ABC some weeks ago, claims for $120,000 of self-education over three years lead to a full-scale audit.  When asked to supply bank statements as well as receipts for their education, they were taken aback, but this is not an alien concept for audits from the ATO. Unfortunately for this person, they made mistakes in previous returns leading to a $24,000 debt – but this doesn’t have to be the case for you.  

Jumping through various hoops to only get stung with a big debt is a pretty jarring experience and you are destined to learn some lessons going through that type of hardship. The number one lesson they learned?  

Keep records and use a tax agent 

The ability for tax agents to easily change previous years returns and to accommodate sudden changes in your financials makes keeping yourself safe during an audit much easier. Furthermore, keeping records needs to stop being an exclusively analog process. Scanning your receipts into software such as XERO or Dropbox not only frees up space in your pocket but makes it far easier to organise and recall receipts.  

At the end of the day, if you have correctly worked out your claims so you aren’t claiming more than you should be and have your documentation in order, you have nothing to worry about. If you aren’t confident that you can correctly work out your deductions, take the stress away and contact a tax agent. We can help you get the most out of your tax return, give us a call today on 3367 0852 or email us through mail@raaccountants.com.au 

How To Stay Safe Against The ATO Crackdown On Declared Income

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Warning Time

The Australian Taxation Office (ATO) is closing in fast on everyone who doesn’t properly declare their income and pay the correct amount of tax.

As your Tax Accountants, we want to help you be aware of what the ATO is doing and how you can protect yourself.

How Does The ATO Know?

The ATO is linking databases of property sales, car purchases, international plane flights, dividends paid from shares, and sales of shares and investments with the income declared on your Tax Return.

If your Tax Return income doesn’t match with your spending or repayment of loans, then the ATO will probably “red flag” you for a tax audit.

These databases have not been linked before like this, so we’re expecting to see a huge increase in the number of tax audits over the next 12 months.

Business Cash Receipts Not Declared

Many small business owners pocket some of their cash takings each week and don’t declare this in their Tax Returns.

The ATO now has the tools to catch this out

When your business Tax Return is lodged, the ATO compares your profit and other key indicators as a % of your total sales with other businesses in your industry. If your profit % is lower than average, then the ATO may decide to do a tax audit just to see if you’re properly declaring all the income you actually receive, or if the expenses you’ve claimed are actually allowable as tax deductions.

Also, not declaring cash income from your business could result in you getting a much smaller price for the sale of your business. We’ll discuss this in a future article.

What Are We Doing To Help You?

We have 2 keys roles as your tax accountants.

  1. Ensure you pay least amount of tax you legally should.
  2. Assist you to lodge a correct tax return, so if you’re audited by the ATO you can sleep peacefully at night knowing that you’ve done the right thing.

While we don’t like paying tax just like you don’t like paying tax – at the end of the day it simply is a normal part of life and there’s nothing we can do about it except for obeying the laws and lodging a true and correct Tax Return.

If you don’t declare all income you receive and if you claim as expenses things that aren’t properly allowable tax deductions – then if you’re audited and lose you will have to pay back tax PLUS pay large penalties to the ATO.

Is this really worth it?

We’re On Your Side. Talk To Us Today!

Let’s talk frankly. If you’ve been naughty in the past, talk to our expert accounting team about it. There are option we can advise you on to help you and reduce possible fines and penalties.

It’s better for us to help you declare past sins before the ATO finds out and starts their attack on you.

We’ll help you fight the ATO if the occasion is needed. But you need to do the right thing – even if you disagree with the tax laws.

Please – don’t doubt our resolve to help you.

Contact your expert team at RA Business Advisors today on 07  or by email at mail@raaccountants.com.au

We’re your good friends. And we’re here to help you!