3 DIY Mistakes That a Tax Accountant Will Help You Avoid
Most people file their tax returns diligently to avoid getting penalised. However, filing your returns correctly and on time comes with additional benefits. For instance, it protects you from identity theft and ensures quicker refunds.
But things may be a little challenging this year due to the pandemic. However, the government has made it possible for all households to get a substantial amount in tax offsets.
You can take advantage of the offsets and get a bumper tax season, but only if you file your returns correctly. Besides, you should work with a tax accountant to ensure accuracy and speed. Read on to learn the mistakes a tax accountant will help you avoid.
Failing to Include Income From Side Jobs
A lot of people fail to disclose some of their income sources to avoid paying taxes for them. For example, many people engaging in freelance gigs do not include them during tax filing. They consider this income non-taxable and therefore do not lodge it during filing.
While the online economy has grown substantially with the pandemic, many people aren't disclosing their earnings. However, you should remember that the Australian Taxation Office has ways of tracking down your expenses. Therefore, it is crucial to include all your income sources. The good thing about lodging the income is that some expenditures count as deductible.
Trying to Get Deductions for Personal Expenses
The taxation office will grant you a deduction when you prove that the money went towards meeting the needs of the business. For example, if you have a restaurant with a delivery service, the cost of maintaining the business vehicles can be listed as a deductible. However, if you use the car for personal use, you shouldn't list it as a deductible expense. Keep in mind that any expenses you incur for personal gain do not qualify for deductions.
Losing the Receipts of Your Transactions
Another mistake many people make is failing to organise their records of payments. Lodging an item without attaching its receipts is just going to give the tax department a reason to flag the claim.
Therefore, you should keep all your transactional receipts safely. Create a system of filing them based on the date you incurred them. But you should also avoid lodging for a deduction for a service you did not pay for, as this can prompt an audit.
These are simple yet costly mistakes people make when filing their tax returns. But you can avoid them by hiring a professional to handle the taxes for you. Tax accountants have training and experience in tackling tax returns efficiently and accurately.