Tax Myths
Tax myths that spell trouble!
The Australian Taxation Office has put out the red flag on taxpayers incorrectly claiming expenses based on BBQ talk or what they call “tax myths”. Last year saw up to 500,000 tax returns amended and the consequences of that being costly adjustments to taxpayers with delays in processing their tax returns.
Myth 1
The “no receipt” limit is set at $300. The ATO notes that taxpayers will often claim $300 or $299 just to make a claim. It’s not ok if you haven’t spent anything on things you need for your job. To make the claim you actually need to have spent the money and show how you worked out the claim.
Myth 2
A perennial favourite, home to work travel. Even with Covid and working from home, your trip into the office just doesn’t pass the test and is considered private expenses. Your home is not considered a place of business. Home to work travel is valid if your employer requires you to transport bulky tools or equipment and there is not a place to store these at your workplace.
Travel from your “Covid” workplace (home) to collect office/work supplies or undertake meetings can be claimable in certain circumstances.
Myth 3
Using the ATO Covid short cut rate for home office expenses, then going on to claim items such as equipment and office furniture is effectively double dipping. So, keep your claims around the Covid rate method or the actual cost method, but certainly not both.
And FINALLY, don’t forget to update your bank account details. Last year many taxpayers forgot to update their bank details. That resulted in their tax refunds going into never, never land. If you want your refund as quick as possible then make sure this key element is checked.
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