Australians are being urged to make sure they’re tax literate as EOFY approaches, with CPA Australia warning that too many individuals are making pricey errors on their tax return.
The accounting physique issued a “stark message” to taxpayers on Monday, saying the Australian Tax Workplace (ATO) shall be scrutinising bills carefully this yr, particularly distant work claims.
“The extent of incorrect tax returns on this nation tells us too many Aussies aren’t tax literate,” mentioned CPA Australia’s resident tax professional Elinor Kasapidis.
“There’s a multibillion-dollar shortfall between Australia’s tax take and what folks ought to be paying. For some teams of taxpayers over 90 per cent of returns are fallacious.”
There is no such thing as a scarcity of issues for taxpayers to bear in mind as they put together their 2023-24 returns this yr, from new guidelines round earn a living from home deductions to a aspect hustle crackdown.
CPA has proposed a three-step framework to assist households get their affairs so as this yr – file, be lifelike, and attain out.
“The Australian tax system is method too complicated; it’s some of the complicated on the earth. The best way our tax system works, in the event you don’t declare a reputable deduction, you gained’t get it,” Ms Kasapidis mentioned.
“Loads of taxpayers miss out on refunds as a result of they don’t know what they’ll declare. With cost-of-living biting, just a few hundred {dollars} in missed deductions might actually harm this yr.”
Tax time: Three Rs
Step one in getting your head round your 2023-24 tax return is understanding what proof you might have for claims associated to work bills or your distant workplace.
In different phrases, people who file every part are in a greater place to maximise their return.
That’s significantly the case this yr, with a COVID period shortcut technique for WFH bills now lapsed, requiring employees who wish to make these claims to offer extra proof.
That features a real-time diary of the hours you’ve labored from house, although your employer is ready to help you with offering this proof too.
“Get your file conserving proper this tax time,” Ms Kasapidis mentioned.
“Make sure you’ve received copies of receipts. Preserve an in depth diary all year long noting down once you labored from house.”
The second R is realism – the tax workplace has its eyes huge open for dodgy claims this yr.
“The tax workplace is unlikely to simply accept a deduction for a packet of Tim Tams eaten in your espresso break at house,” Ms Kasapidis mentioned.
“As a lot as your colleagues wish to see your pot crops, the ATO gained’t settle for claims for home-office décor.”
Australians are additionally being inspired to succeed in out to an expert this yr, significantly with modifications to WFH deductions now requiring extra complicated depreciation calculations to be made.
There are not any scarcity of choices for these in search of recommendation, and it doesn’t should be pricey, both.
In actual fact, many taxpayers can entry free recommendation from government-funded tax clinics run out of universities throughout the nation.
Greater than a dozen clinics exist, and they’re staffed with specialists that may provide help to demystify tax time and enhance literacy.
A full record is out there on the Australian Taxation Workplace (ATO) web site.