What’s worse? The idea of sitting at your computer for hours doing tax, or forking over hundreds to have someone do it for you.
When it comes to tax, the lure of the expert is strong.
But for those of us with “simple affairs” a DIY approach is actually recommended.
“ I don’t think everyone needs to see an accountant!” Accounting partner Michelle Maynard from Carbon Group reveals.
“The ATO system through MyGov is getting easier for those with simple tax affairs (I.e salary and wages with interest income).”
Tax agent Debra Anderson agrees.
“If you’ve got simple tax affairs then absolutely use the ATO’s free online myTax system.”
They recommend to see an expert if things start to get a little more complicated.
Ms Maynard says: “If your affairs are a little more complicated, say if you have investment properties or shares, if you have a business or if you work situation involves allowances and complicated deductions – we definitely recommend you seek advice.
“The ATO are focussed heavily on work related deductions and rental property deductions are the moment so it pays to get them right.”
Here are their expert tips for those who are DIY-ing it.
Double check the info on eTax
Be careful with the pre-filled information in etax and make sure to double checking everything as sometimes there is a lag of when information is available to the ATO for them to prefill.
Don’t listen to your mates
Ms Anderson says listening to your friends or colleagues tell you what you can or can’t claim can be a trap.
“Unless they are registered tax agents please, please don’t listen to them.”
Don’t lie about deductions
Only claim for deductions you have actually incurred and if your work related deductions (total) exceeds $300 you must have receipts for ALL expenses.
Do some research
Read the ATO website it has factsheets for different industries which gives you information about what you can and can’t claim.
Avoid these other easy mistakes
– Forgetting to declare interest
– Thinking you can claim ‘standard deductions’ when there is no such thing as a standard deduction.
– Forgetting to include AirBNB or other sharing economy income
– Overclaiming rental deductions especially on properties where the ownership is shared
– Overclaiming interest on rentals where you’ve used the loan to also buy something personal e.g. a boat
– Overclaiming car expenses for travel to and from work
– Not keeping a logbook or not updating it when your circumstances change or every 5 years whichever comes first
– Claiming a deduction for something you were reimbursed for
Ms Anderson’s three golden rules:
1. You must have spent the money yourself and weren’t reimbursed.
2. It must be directly related to earning your income.
3. You must have a record to prove it.