Top tax time myths for 2020 that slow down returns
The ATO has published a list of common mistakes and misconceptions taxpayers have around tax time.
“Our main priority is to help people get the facts straight before they lodge so that it’s a smooth, easy and fast process”, Assistant Commissioner Karen Foat said.
The ATO has said that last year nearly 500,000 individual tax returns were amended, with some taxpayers even amending their own returns before they were processed, which actually slows down the processing of their return.
The top tax time myths of 2020:
- bank details don’t update themselves: the ATO does not keep track of changes to bank nominations for taxpayers to receive tax refunds (if any);
- it’s not okay to double dip: “It’s important to remember that if you’re claiming under the shortcut method (of working from home expenses), you cannot claim a separate additional deduction for any expenses you incur as a result of working from home,” Ms Foat said;
- home to work travel is not claimable: generally, most people cannot claim the cost of travelling from home to work unless, they are required by their employer to transport bulky tools or equipment and there is not a safe place to store these at the workplace;
- you can’t just claim a flat $300 if you had no expenses: “We often see people claiming a deduction despite not purchasing anything. When we question them, we often find it’s because they thought everyone is entitled to claim $300. While you don’t need receipts for claims of expenses up to $300 but you must have actually spent the money and be able to show us how you worked out your claim”, Ms Foat said;
- work-related expenses need to be work-related: taxpayers can only claim for expenses that are directly related to earning their income;
- lodging earlier doesn’t always mean getting your refund earlier: each year the ATO automatically includes information from employers, banks, private health insurers (and this year JobKeeper for employees and JobSeeker amounts) in people’s returns. For most people this information is ready by the end of July. Taxpayers are advised to include all relevant information if lodging before the ATO automatically updates the information to avoid delays in return.
If you would like to know more please contact one of our accountants on 07 4639 1099 or come in and see us at 4 Bowen Street Toowoomba.