Be the tortoise not the hare this tax time, says CPA Australia
• Rushing your tax return can mean mistakes – slow and steady wins the race
• Take time to gather and prepare all your evidence, check what you can claim
• The more complex your income-earning activities and finances, the more you should consider getting professional tax advice
CPA Australia is urging Aussies to be the tortoise not the hare this tax time.
When it comes to getting your tax return right and claiming everything you’re entitled to, slow and steady definitely wins the race.
“With cost of living pressures and the desire to ‘just get it done’, many taxpayers will likely submit their returns early, but doing so risks making costly mistakes – and can ultimately be self-defeating,” says CPA Australia spokesperson Gavan Ord.
“The best tip for tax time is to walk, don’t run; it’s not a race. Don’t be the first person at your accountant’s door, because chances are you won’t have all of the information you need to properly do your tax return, increasing the risk of making costly mistakes.
“There’s a misconception that lodging early means you’ll receive your refund first, but it’s not as simple as that. In fact, if the ATO asks you for additional information or you get things wrong, it will hold up your refund, or you could have to essentially re-lodge your return altogether.”
A lot of information will be pre-filled by the ATO in your tax return. So it’s best to wait until all the data is finalised before lodging your return. This is typically completed by the end of July, but can take until mid-August.
Check that your end-of-year income statement from your employer says ‘tax ready’ and that your private health insurance, dividend and interest information is available before completing your return. Otherwise, it could include unfinalised data, and you may need to amend your tax return and pay additional tax.
Claiming appropriate work-related expenses is crucial
It’s important that everyone pays the correct amount of tax, and that you claim for everything you’re entitled to. Claiming deductions for work expenses is one of the biggest areas where people get it wrong; either by claiming too much, or not enough.
That’s why CPA Australia encourages Aussies to ensure they’re thorough with their work and work-related education expenses, including expenses related to working from home and second jobs.
“Claiming all of your work-related deductions could considerably increase your refund so it pays to be patient and get it right,” said Mr Ord.
Typical work-related expenses include things like uniforms and protective items, work phone and internet costs, subscriptions and union fees, and travel expenses between worksites or client locations (but not the commute to and from home).
If you work from home, you may also be entitled to claim some deductions. Make sure that you have receipts and a work diary to back up your claims and show how you’ve calculated your private-work use percentage.
Many Australians – especially young people – are working multiple jobs, which can create issues at tax time as they can be caught in an unintentional tax trap because of the tax-free threshold. The first job attracts the tax-free threshold, so if you don’t declare to your second or subsequent employer that it is your second job, you may be undertaxed, resulting in a larger tax bill.
CPA Australia is therefore reminding taxpayers who work multiple jobs to only claim the tax-free threshold in relation to one job. If it’s claimed for more than one job, you are more likely to be required to pay top up tax than get a refund.
“Completing your tax return properly can be time-consuming, but it’s your personal responsibility to get it right – and is in your financial interest to do so.
“The more complex your earning activities, the more you should consider expert advice. Remember that the fee you pay to a registered tax agent, like a CPA, to complete your tax return is itself tax deductible. It’s win-win.”
Media contact
Simon Downes
External Affairs Lead
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0401 461 503