BMO is warning income earners to be honest and vigilant in their 2017-2018 tax returns to ensure they get the best result possible and avoid facing penalties. BMO Accountants Partner Michelle McVeigh said Australian Tax Office (ATO) had introduced a range of data matching and data mining tools to catch out tax cheats.
“Many people don’t realise that the ATO now uses a range of techniques make sure that what you claim in your tax return lines up with reality,” she said.
“For example, the ATO has the ability to trawl social media sites like Facebook and Instagram to verify your claims and they can look at toll road information to double check car and travel claims.
“They also have methods to data match your claims and deductions against those in the same occupation and income brackets, so if there are anomalies, they may take a closer look. Remember as technology evolves the ATO has access to more sophisticated data collection methods and are also working with more external agencies to access taxpayers’ information.”
She said it was a good idea to use a registered tax agent or qualified accountant to assist with tax returns.
“Seeing an accountant not only helps to reassure you that your claim is accurate but can also help maximise your entitlements on deductions that you may not know you are eligible to claim, therefore increasing your possible refund.”
Mrs McVeigh said car expenses are once again likely to be on the ATO’s radar.
“Car expenses can be a tricky one, and they are often incorrectly claimed, so it’s important to remember that you can only claim a deduction when you use your car to perform your job as an employee and you should double check the rules with your accountant.”
Other common items on the ATO watch list are deductions for travel, internet, mobile phone and self-education.
She said that with the Government’s new tax cuts coming into play for the 2018-19 year, getting the right advice early was a smart move.
“From 1 July this year, those earning up to $125k a year will be eligible for the Low and Middle Income Tax Offset which will be paid in the form of a ‘refund’ after you submit a tax return at the end of the financial year (from July 2019). Those earning between $48k and $90k should receive the maximum refund of $530.
“Talking to your accountant in July this year can help you position yourself for the best tax outcome for next year.
“Accountants can help you budget, work out the best way to structure your finances, and look at options like salary sacrificing, so you keep as much money in your own pocket as possible.”