Ringing in the new financial year, the Australian Taxation Office has warned of the common tax-time myths, which last year saw up to half a million individual tax returns amended, with some taxpayers even amending their own returns before they were processed.
In an effort to make this tax time as smooth as possible, Assistant Commissioner Karen Foat has asked taxpayers to stay vigilant and avoid being tripped up by tax-time myths that slow down returns.
“Every year, we see people tripped up by tax-time myths. Unfortunately, this often results in slowing their return down when either they or we realise their mistake as the return is processed,” Ms Foat said.
“Where it doesn’t delay the initial return, it can result in a surprise tax bill later on.”
But while there are always a range of myths that need busting around tax time, the changed circumstances this year have seen some new additions to the list.
“Our main priority is to help people get the facts straight before they lodge so that it’s a smooth, easy and fast process,” Ms Foat said.
As such, the ATO has issued an updated list of get-rich-quick schemes to beware of.
While the ATO receives information from banks, this doesn’t extend to updating details for the bank account taxpayers nominate to have their refund deposited into. Last year, many people, in their rush to lodge early, forgot to update bank details and delayed their refund, the ATO has warned.
It’s not OK to double dip
The ATO has once again warned of doubling dipping, especially on the back of the coroanvirus changes to working conditions.
“We are concerned that some taxpayers may either accidentally or deliberately double dip by claiming their working-from-home expenses using the all-inclusive shortcut method while also claiming for specific items such as laptops or desks,” Ms Foat said.
“It’s important to remember that if you’re claiming under the shortcut method, you cannot claim a separate additional deduction for any expenses you incur as a result of working from home.”
Home to work travel is not claimable
Generally, most people cannot claim the cost of travelling from home to work unless they are required by their employer to transport bulky tools or equipment and there is not a safe place to store these at the workplace.
“If you are working from home due to COVID-19, but need to travel to your regular office sometimes, you still cannot claim the cost of travel from home to work as these are still private expenses.
"Even though you are working from home, your home is still a private residence — it is not a ‘place of business’,” Ms Foat said.
‘Taxpayers can’t just claim $300 or $299 if they had no expenses’
The ATO noted it often sees people claiming a deduction despite not purchasing anything. This often comes down to a false belief that everyone is entitled to claim $300.
“While you don’t need receipts for claims of expenses up to $300, you must have actually spent the money and be able to show us how you worked out your claim.”
Work-related expenses need to be work related
Each year, the ATO sees people trying to claim personal expenses under the guise of work-related expenses.
This year, it is warning taxpayers that they can only claim for expenses that are directly related to earning their income.
“We have been reminding taxpayers recently that if they are in jobs that require physical contact or close proximity to customers and they had to buy their own hand sanitiser, gloves or masks for use at work, that they can claim these items,” Ms Foat said.
However, the ATO has explained that people who aren’t in jobs that aren’t in close proximity to the public, or people who have purchased these items for their general use, cannot claim them.
“For example, people who are working from home can’t claim these items and so a high work-from-home claim together with a large claim for protective items may trigger a red flag and slow down your return,” Ms Foat said.
People are also being reminded they cannot claim for the costs of setting their children up for home schooling.
"These costs are private expenses,” Ms Foat reminded.
Lodging earlier doesn’t always mean getting your refund earlier
Each year, the ATO automatically includes information from employers, banks, private health insurers - and this year JobKeeper for employees and JobSeeker amounts - in people’s returns. For most people, this information is ready by the end of July.
Since leaving out income can slow returns, taxpayers that are lodging before the ATO has prefilled this information are being reminded to ensure they include all of the necessary information before they submit.
Lastly, the ATO has reminded taxpayers that tax returns lodged electronically are usually processed in less that two weeks. Taxpayers are also being told they can check the progress of their return by logging on to myGov and clicking through to the ATO.
Maja Garaca Djurdjevic
01 July 2020
For more than 20 years, Sam has been a financial planner helping individuals and families achieve their financial planning goals, by providing advice on Investment Planning; Insurance Planning; Tax Planning; Retirement Planning; and Estate Planning. Working with a network of highly skilled professionals in Sydney he is dedicated to providing high-quality advice and integrated wealth management solutions that simplify and enhance the quality of his clients' lives.
Sam established his own firm in 1997 and has overseen its steady development and growth. Attention to detail, good listening skills and great empathy are symbols of his appreciation by his clients. He has built long-term relationships with his growing client base and aims to provide excellent customer service.
Sam began his financial planning career in 1993 after completing a Bachelor of Science degree in 1991. Since this time he has accumulated many professional qualifications such as:
Sam has volunteered with the Cancer Council of NSW and can be seen almost every year volunteering or participating in the 7 bridges walk.
Away from the business, he enjoys spending weekends with his son. He is also a football (soccer) tragic and is a massive Chelsea FC fan.
Having worked for national financial planning companies in the past, George has extensive experience in the provision of advice in risk insurance, investments and retirement planning and is focused on forming long-term relationships with his clients.
George has been awarded a Masters of Commerce (Financial Planning) and a Bachelor of Commerce through University of Western Sydney as well as having the Diploma of Financial Services (Financial Planning).
Jane Lim is a friendly character with a bubbly personality. She has the unique ability of making complex information sound simple and easy to digest.
Jane entered the financial services industry in 2006, and worked with big blue-chip financial companies such as Count Financial Limited and AMP Financial Planning Pty Ltd.
She holds a Master's degree in Applied Finance through Macquarie University, and she is a member of the Million Dollar Round Table.
Being a self-confessed "tennis nut", Jane spends many weeknights in the tennis court, and is a frequent member of Sydney's Eastern Suburbs Tennis Competition.
Being a highly motivated professional, Jane is always eager to help her clients on a wide range of financial planning needs.
Mortgage Broker/Financial Planner
Paul has been a financial planner for over 15 years helping individuals and families successfully achieve their financial planning goals. He is very focused on building successful long-term harmonious relationships with his clients.
He provides a holistic approach on various aspects of financial advice encompassing areas such as Investment Planning; Insurance Planning; Tax Planning; Retirement Planning and has extensive experience and knowledge in these fields.
Paul's professional qualifications are:
Away from his professional life, he enjoys spending his time with his family doing various activities such as coaching his son and taking him to games. He is a very avid sports fan and a cricket enthusiast.
Client Services Manager
Christian joined Capitalwise as Client Services Manager, with backgrounds in both customer service and administration.
Christian is passionate in providing excellent customer service by being attentive to client’s need as well as being able to circumnavigate challenges.
He holds a Master's degree in Commerce specialising in Marketing through the University of New South Wales.
Volunteering is one of his delights in life, where he had spent time being involved with the Centre for Volunteering, St Vincent de Paul's Society, and Sculpture by the Sea in a variety of positions.
Jenny is a University of New South Wales graduate who joined the team as an Administration Assistant. She is keen to put her customer service and organisational skills to use, making sure day to day operations run as smoothly as possible.
Outside of work, Jenny focuses her efforts on karate and ice hockey. She can often be found coaching and practicing karate at her alma mater. The rest of her time is spent at one of Sydney’s many ice rinks playing, practicing, or officiating ice hockey.
B Econ (Hons) Cert IV FS (MB) Dip. FS (FP) AFB MeSAFAA
Max has over 20 years experience in the finance and lending industry of which over 15 years has been in financial advice. Max attained a Bachelor of Economics honours degree at The University of Sussex in 2004, after which he settled in Australia with his family.
Max has never stopped studying as he is always looking at ways he can better assist his clients and has studied many courses in financial advice, lending and technical analysis as he continues to try and stay ahead of his competitors in terms of the knowledge he can share with his clients.
Max has worked for several large and successful organisations before starting his own business in 2014. He has gained valuable experience from the likes of Lloyds Bank, American Express, HSBC, General Electric, Commonwealth Bank and Westpac. He draws on this vast experience to benefit his clients whilst bringing a much more personal touch than you would get from one of these larger organisations.
Max’s philosophy is to always put his clients first, which is what makes him so successful and popular with his clients, having built a thriving business primarily through referrals from very happy clients.
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