Common Mistakes when Lodging Individual Tax Return

Common Mistakes when Lodging Individual Tax Return

The ATO conducts comprehensive tax audits every year to find out unprecedented tax gaps that occurred amongst individuals. The Australian Taxation Office (ATO) primarily uses high-end analytical tools to perform this task. They cross match data obtained from multiple sources via electronic channels. This is to identify individuals making wrongful claims pertaining to their individual tax return in Perth. In this context, given below are a few erroneous claims which individuals make related to their individual tax returns.

  1. Sole trader expenses claims

While lodging their individual tax return, sole traders in Australia erroneously claim some work related expenses. These typically include the following:

  • Offsetting losses of business against other income where requirements of non-commercial losses tests are not satisfied.

  • Claiming of illegitimate expenses which are subject to the pertinent PSI (personal service income) rules. These include payments made to associates for assistance work and certain home occupancy costs. The latter chiefly include land tax, rates, interest, mortgage and rent etc.

  • Claiming of travel costs related to private affairs without any substantial evidence

  • Claiming of illegitimate vehicular expenses. Say for instance, if you use your car from house to your workplace and vice versa. Claiming a percentage on certain car expenses where the logbook wasn’t maintained is also considered illegitimate.

  • Claiming of superannuation costs for your expenses that have not been paid.

  • If you have applied for your small concessions erroneously

  • Claiming of deductions on certain penalties and fines (except if they are included in a contract)

  • Claiming of costs against certain non-assessable income. Say for instance income earned from hobby etc.

  • Deductions claimed for certain private expenses. These primarily include GST credits on expense amounts claimed by taxpayers who’re GST registered.

Contact a qualified tax agent in Perth to get the choicest assistance in this matter.

  1. Miscellaneous Investments and Rental Property

Individual taxpayers claim certain erroneous expenses on a few rental properties and miscellaneous investments. These include the following:

  • Claiming of the immediate deduction for borrowing expenses. This particularly includes expenses pertaining to loan establishment.

  • Claiming certain expenses when the property is not available for rent or is not being rented.

  • Claiming of interest on the portion of the loan which has no connection to certain crucial aspects of your property. These include the maintenance, amendment, purchase, and running expenses of your rental property.

  • If you classify your depreciable assets, capital works, and repairs erroneously under the capital allowance provisions.

  • Claiming of certain work-related deductions which are comprised of improvements as compared to repairs.

  • Claiming of deductions for certain repairs done right after the property was purchased.

  • Claiming of deductions concerning the expenses which are included in the purchase of your property.

So, do you think that you’ve made any of the individual tax return claims stated above? If yes, then, you must hire a well-versed tax agent in Perth as soon as possible. A tax agent in Perth has a clear notion about the various erroneous individual tax return costs which are claimed. Accordingly, he or she will guide you about these incorrect claims and familiarize you with the right ones. This will allow you to lodge your individual income tax in Perth unmistakably.

  1. Expenses related to work for salaried individuals

Individuals who are earning a salary in Australia also claim certain work-related expenses mistakenly. These basically include the following:

  • Not allocating the deduction for private or a non-work related portion pertaining to the expense.

  • Claiming of immediate deductions for the purchase of assets costing around $300 or above which have an optimal lifespan of 1-year.

  • Claiming of a deduction pertaining to self-education expenses. These include expenses that aren’t directly linked with the present-day work activities.

  • Claiming of various illegitimate home office costs. These chiefly include costs related to the occupancy of the property. Land tax, interest rates, mortgage, and rent comprise the list.

  • Claiming of some unlawful laundry, clothing, and uniform expenses. These include costs claimed on conventional footwear and clothing items.

  • Claiming of certain illegitimate overtime meal and travel expenses every day the conditions of which haven’t been satiated. These expenses will also be considered illegitimate where the employer didn’t pay any related allowances.

  • Claiming of certain car and travel expenses spent merely for private purposes. This predominantly includes traveling from home to work and

  • Claiming of standard deduction which is less than $300 under exception till the substantiation rule with zero expenses incurred.

There are a couple of additional illegitimate individual tax return claims which people tend to make erroneously. Claiming private or domestic deductions and claiming illegitimate deductions for premiums of income protection are some of them.

Final Note!

If you have made any of these unjust claims until recently, you must seek professional assistance immediately. So, hire a registered tax agent from Perth. One of the best tax agents Perth knows that exactly which deductions you can claim lawfully. Depending upon your individual circumstances, your tax agent in Perth will provide you the finest services accordingly.

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