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Taxpayers urged to follow 3 ‘simple’ principles this tax time

  • June 08 2021
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Taxpayers urged to follow 3 ‘simple’ principles this tax time

By Maja Garaca Djurdjevic
June 08 2021

“Don’t poke the bear,” CPA has advised taxpayers ahead of this tax time and urged them to follow a few “simple” principles.

tax time

Taxpayers urged to follow 3 ‘simple’ principles this tax time

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  • June 08 2021
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“Don’t poke the bear,” CPA has advised taxpayers ahead of this tax time and urged them to follow a few “simple” principles.

tax time

Omitting income from a tax return is a sure way to draw the Australia Taxation Office’s attention, accounting body CPA has said in a cautionary statement to taxpayers, in which the body drew attention to the Tax Office’s immense information gathering powers.

“Most transactions where money changes hands leave a digital footprint, and the ATO has even greater information gathering powers than the police,” said senior manager of tax policy at the CPA, Elinor Kasapidis.

“If you’re thinking of playing hide and seek with the ATO, don’t expect them to close their eyes and count to 10. Assume they have full line of sight on your income and don’t poke the bear.”

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Recognising that other than accountants, most Aussies don’t enjoy tax time, Ms Kasapidis encouraged a shift in mindset.

“People sometimes forget that paying tax is a good thing. The past 18 months is a great reminder of why we do it.

“The economic stimulus that kept millions of Australians and small businesses afloat during the pandemic is being paid for with our taxes,” said Ms Kasapidis.

Noting that while avoiding tax is not legal, Ms Kasapidis shared several legal ways Aussies can maximise their tax refund.

According to Ms Kasapidis, while Australia has one of the most complex tax systems in the world, for most employees it boils down to a few simple principles:

1. If you earned money, you need to report it.
2. If you can't prove an expense, you can’t claim it.
3. If you want to make sure you’ve got it right, see a tax agent.

Ms Kasapidis cautioned that while claiming deductions for work expenses is the single biggest area where people go wrong, the way the tax system works “if you don’t claim a deduction, you won’t get it”.

“Plenty of people miss out because they didn’t know to ask. Don’t copy and paste last year’s deductions into this year’s return; it’s another surefire way to poke the bear.

“You can cut your own hair, but you’ll get a better result if you see a professional. It’s the same with completing your tax return. If you see a tax agent, you can be confident you’re paying the right amount of tax and getting the maximum refund you’re entitled to,” said Ms Kasapidis.

The CPA also cautioned Aussies to lodge on time, by 1 November 2021, but reminded all taxpayers engaging a tax agent that they need to get on their client list before 31 October.

Taxpayers urged to follow 3 ‘simple’ principles this tax time
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About the author

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Maja Garaca Djurdjevic is the editor of nestegg and Smart Property Investment. Email Maja at [email protected]

About the author

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Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of nestegg and Smart Property Investment. Email Maja at [email protected]

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