What is the ATO focusing on this year?
This year, its watch is on people who due to their occupation type claim a tax deduction for using their computer, mobile phone or other electronic “device”.
And that pretty much will cast the net over every occupation and taxpayer in Australia.
Whether you are a surgeon, tradie, teacher or flight attendant, most jobs require the use of a phone, computer or other electronic device out of hours, and this is reflected in our tax returns.
Of the $19.5 billion of work-related expenses claimed each year, electronic devices are grabbing a fast-growing share as the use of technology increases, ATO assistant commissioner Karen Anstis says.
“People are using their computers at home for work-related purposes but it is very important they understand the distinction between what is work-related and what is personal use,” she says.
Anstis says the ATO is using increasingly sophisticated technology to check deductions and track down unusual or excessive claims.
“That enables us to look at every single tax return.”
This year the ATO is also focusing on work-related claims around travel expenses, and people who transfer bulky tools and equipment between home and work.
“We have guides on our website for specific industries and occupations at ato.gov.au/occupations,” Anstis says.
“The number one piece of advice I have for taxpayers is to claim the right amount — no more, no less — and have evidence to substantiate their claim.”
The ATO is using increasingly sophisticated technology to check deductions and track down unusual or excessive claims. Source:Supplied
The ATO is also introducing a streamlined online tax return for an estimated 1.4 million people with simple tax affairs.
It’s my Tax online service has only 10 main screens to review and can be filled out on a PC, tablet or smartphone.
“It’s really easy, and it’s important that as many people as possible are aware they can use my Tax,” Anstis says.
“People can use my Tax from July 1, but if they wait until August we will automatically pre-fill the return with information from previous tax returns and with information provided by their employer, bank, share registry, government agencies and their health insurance provider.”
The eTax online software remains for more detailed returns, and last year attracted more than 2.8 million users.
Tips to reduce your personal tax bill
- Prepay expenses: By prepaying 12 months of tax-deductible expenses, you can bring the deduction forward into the 2013/2014 financial year. A good example of this is income protection insurance but other options are prepaying interest on margin loans or investment loans.
- Delay income: If you can, try to defer income until after June 30 to avoid paying tax this financial year. As an example this may be done by reviewing term deposit maturity dates or legitimately deferring income by holding off issuing invoices until July 1.
- Charity: If you are thinking of donating money, you may be able to receive a tax deduction for gifts and receive that deduction this financial year.
- Repairs and maintenance: If you hold an investment property, consider doing minor repairs and maintenance prior to 30 June.
- Buy health insurance if you are a high-income earner: To avoid the Medicare Levy Surcharge, high-income earners should take out private health cover. To avoid the surcharge for the entire year, the insurance needs to be held for the entire year.
- Keep the taxman happy: The onus will always remain on the taxpayer to prove everything so have all the right documents and be able to prove all expenses. The biggest issue in an audit is documentation and substantiation of everything.