“If it sounds too good to be true, it usually is.” –Graham Whyte
Tax agents will promise to maximise your refund if you choose to lodge your tax return with them. What you may not realize is that some will encourage you to claim too big of a refund – more than the ATO would deem you entitled to if they were aware of your actual tax situation. This definitely does not mean that they’re all out to get you. Just be wary, and don’t be too shy to ask the questions that you feel you need answers to.
Beginning this tax season, the ATO is really cracking down on certain tax deductions being claimed. If your tax return is “red flagged” by the tax office, the best that could happen is that your processing time is delayed because an ATO representative will need to review it further. The worst that could happen, in circumstances where a taxpayer has deliberately claimed an incorrect amount, is that an investigation could begin and you could be liable for multiple penalties.
Three Golden Rules to remember when claiming tax deductions.
Whether it’s a manual, e-book, or by word of mouth, there are a set of rules for almost everything. This even includes something that seems as simple as reporting tax deductions. When doing so, be sure to take into account these three rules of thumb:
- Make sure the expenses you claim have actually been incurred.
- Ensure that your expenses are 100% work-related.
- Keep the receipts to prove the claims are for valid expenses.