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Life

Avoidable errors: 5 tips for avoiding common tax mistakes in 2023

Avoidable errors: 5 tips for avoiding common tax mistakes in 2023

ITP Accounting Professionals

This article was made possible thanks to ITP Accounting Professionals, an Australian tax firm that specialises in tax refunds for sole traders, partnerships, trusts, companies and more.

Learn more at itp.com.au

Nobody likes taxes, but as the saying goes, they’re the only guarantee in life apart from death.

With that in mind, it’s important to ensure that you get things right. If you want to avoid sticky situations with the tax department, stick to the following five tips:

1. Don’t go into things blind

While completing Australian tax returns online is certainly possible, and even preferable in many situations, it’s vital to use a reputable platform that’ll give you guidance if you need it.

Going directly through the ATO leaves you open to forgetting things or getting things wrong, which can cause a whole host of issues for you. So it’s best to engage at least some level of assistance from a tax expert or organisation.

2. Keep receipts

Claimable expenses are all around us, and you may not even realise something can be claimed when you’re purchasing it. That’s why we suggest keeping all of your receipts throughout the year so you’re covered and can lodge the expense with your tax return.

Stationery, for example, is commonly overlooked but claimable in many cases, as is the mileage on your vehicle if you’re driving from the office to an offsite location for work purposes.

3. Don’t forget about super

If you’ve made voluntary contributions to your super throughout the year, these may impact your tax return. While this is usually in a positive way, it’s still not something you want to be making a mistake with.

We suggest speaking with a specialist SMSF tax accountant if you have a self-managed super fund and going over your contributions with a professional if you have a standard fund.

4. Check what you can claim

Throughout the year, it’s a good idea to make a list of everything you spend in regard to your employment or business. While not everything will be claimable, having a top-level view of everything you’ve bought helps you ensure you don’t miss out on any deductions.

After all, your money is far better off in your pocket than the government’s, so you’ll want to maximise the funds you’re entitled to get back or keep, depending on your situation.

5. Don’t forget your investments

Finally, it is vital to remember your investments at tax time. Even if you haven’t bought or sold any assets during the financial year, they can still have a significant impact on your tax obligations. So you need to keep accurate records and stay on top of things.

For example, if you own commercial property, you’ll need to consider both your profits and losses for the financial year. This includes any rent you’ve received, improvements that have been made to the premises (both by yourself and your tenants if changes are permanent), any maintenance you’ve done, and more.

This may seem simple enough at face value, but once you start getting into the percentages you can claim and what ‘profit’ is actually defined as, in terms of taxation, things can get messy. This is an area you really don’t want to make a mistake in, so consider enlisting professional help to ensure you get everything right.

While these tips should certainly help you improve your accuracy, it’s crucial to note that the tax department doesn’t take kindly to mistakes, especially ones that benefit you rather than them. Even honest accidents can land you in hot water, so if you’re ever in doubt, don’t hesitate to call in a professional.

ITP Accounting Professionals

This article was made possible thanks to ITP Accounting Professionals, an Australian tax firm that specialises in tax refunds for sole traders, partnerships, trusts, companies and more.

Learn more at itp.com.au