As the end of the financial year gets closer, more and more Australians are preparing to lodge their tax returns. And this year, the already nerve-racking process of submitting a tax return is even spookier for many as the Australian Tax Office (ATO) dished out a stern warning.
From July 1, income earning Aussies will be able to lodge their annual tax return and find out they are in for either a pleasant surprise or a nasty shock, depending on how much they receive back from the ATO for the financial year.
One survey by Officeworks found that 26 per cent of Aussies between 18 and 29-years-old are concerned about owing money to the ATO this year. As well as this, 87 per cent say they are equally confused (if not more!) about what to do with their tax return. Nice to know I’m in with good company.
And the pressure is not decreasing anytime soon, with one expert telling news.com.au that this year the ATO is actually going even harder and will be “much less forgiving” than usual.
“Much less leniency for mistakes, and less likely to waive interest and penalties, and chasing debts hard,” tax lawyer Harry Dell told the publication.
*Gulp*
Some things cause concerns for young Aussies such as not knowing if they have paid enough, which can sometimes occur when an employer is not making deductions for things like HECS/HELP debts.
Thankfully, Dell did have some advice for anyone who was concerned and unsure about what to do when it comes to claiming their return.
“The Pay As You Go Withholding system is designed so you overpay a little and get a refund at the end of the year – without any deductions,” he said.
So if you aren’t making any deductions, and your employer has been doing everything right, then you’re fine! Congratulations, go treat yourself.
But if you do plan on making deductions on expenses like work purchases, or are surprised by owing more than you thought, then Dell’s nugget of advice is the same one I’m constantly telling my parents: seek professional help.
“Get professional help early if you think you need it, accountants will be very busy this year,” said Dell.
“If you can’t see why enough wasn’t withheld, get a professional to explain your tax return and what caused the surprise bill.”
Another more direct warning came form the ATO’s Assistant Commissioner Rob Thomson, who warned Australians making tax deductions to play by the rules and not to “double dip”.
“One thing we’re focused on this year is making sure that people don’t double dip, so they don’t claim things like their internet or their phone expenses separately if they’re using that fixed rate method,” Thomson said, per ABC.
The fixed-rate method refers to claiming expenses such as internet or phone at 67 cents per hour for every hour worked from home. Thomson says the ATO will be working extra hard to ensure Aussies are not claiming one thing as two, e.g. the phone and internet.
He encouraged that the way to remain safe here is to keep thorough records of all the hours worked from home over a year so you can prove to the ATO each hour claimed is legitimate.
“Now that can be a time-sheet, that can be a spreadsheet, that can be a diary, whatever the person wants that works for them,” he said.
Hopefully this has helped to ease some of your concerns! We also have this handy explainer here on how you can claim the other government payments announced in the 2024 Federal Budget!
And if you’re still scared… see you on July 1 when the big scary tax boogeyman comes for us all.
[Image: ATO]
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