SYDNEY — As people start working on their annual tax returns, the nation’s peak accounting body, Certified Public Accountant Australia, has warned if income is omitted the tax office will be on the case.
Certified Public Accountant senior manager of tax policy Elinor Kasapidis, in providing tips for employees at tax time, says most transactions where money changes hands leaves a digital footprint.
“The Australian Taxation Office has even greater information-gathering powers than the police,” Kasapidis says.
“If you’re thinking of playing hide and seek with the Australian Taxation Office, don’t expect them to close their eyes and count to 10. Assume they have full line of sight on your income.”
Claiming deductions for work-related expenses is the biggest area where people go wrong, both by claiming too much or not enough, she added.
“Plenty of people miss out because they don’t know to ask,” she said.
But equally, don’t just copy and paste last year’s deductions.
The Australian Tax Office has already warned it will be taking particular note of work-related expenses because the Covid-19 pandemic has changed people’s work habits.
It will look closely at anyone with significant working-from-home expenses, especially those that maintain or increase claims for things like car, travel or clothing expenses.
This is the first full income year to fall within the Covid environment.
Kasapidis said employees who spent time working from home may be entitled to claim a deduction for expenses such as electricity and the internet.
“The Australian Taxation Office’s ‘shortcut method’ is suitable for many taxpayers and will save time and effort,” she said.
This allows an all-inclusive rate of 80 cents per hour for every hour people work from home, rather than needing to separately calculate costs for specific expenses.
Employees who lost their jobs or worked reduced hours may have received a mix of government allowances, salaries and redundancy payouts during the financial year.
“It may come as a surprise to many people to learn that their JobSeeker and redundancy payments are taxable,” Kasapidis said.
The Certified Public Accountant Australia’s simple tax return principles are if your earned money, you need to report it; if you can’t prove your expenses, you can’t claim it and if you want to make sure you’ve got it right, see a tax agent.
To help the public in difficult times, the taxation office released a set of guidelines to help them sort out their taxes and claims.
(Edited by Vaibhav Vishwanath Pawar and Praveen Pramod Tewari)
The post Don’t Play Hide And Seek With Australian Taxation Office: Report appeared first on Zenger News.
