With Tax Time 2018 upon us, the ATO has prepared a guide of the five most common mistakes they see, as follows:
- leaving out some of income, such as forgetting a temporary or cash job, capital gains on cryptocurrency, or money earned from the sharing economy;
- claiming deductions for personal expenses, such as home to work travel, normal clothes, or personal phone calls;
- forgetting to keep receipts or records of expenses – around half of the adjustments the ATO makes are because the taxpayer had no records or they were of poor quality;
- claiming something you never paid for (often because of a belief that everyone is entitled to a ‘standard deduction’); and
- claiming personal expenses for rental properties – either claiming deductions for times when the taxpayer was using the property themselves, or claiming interest on loans used to buy personal assets like a car or boat.
ATO Assistant Commissioner, Kath Anderson, has reiterated the three ‘golden rules’ for work-related expenses: “You must have spent the money yourself and not have been reimbursed, it must be directly related to earning your income, and you must have a record to prove it.”
Originally posted on the OakWealth Blog.