7 Tax Myths: Heres The Real Score

By Author: Tax Return
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Taxes are collected from people who earn a certain amount of money. When you dutifully file your tax return and pay your taxes, you’re actually giving back to society what you’ve earned — because the government uses taxes to fund public-benefitting projects and services. However, several tax myths may affect how you perceive tax paying. Here are seven of them.

I don’t earn enough to be obliged to pay taxes. In Australia, residents are required by the law to pay income taxes if they earn more than $18,200. It’s only when your income falls below that threshold that you’ll be paying zero taxes. To avoid incurring penalties, make sure to lodge your returns before October 31.

I can claim for non-work-related expenses. If you’re wondering how can you file a tax return and pay a lower tax, deducing work-related costs is the best way to do so. However, many people make the mistake of claiming personal expenses. For instance, if you bought new work attire that your employees do not require, the cost for buying that is considered a personal expense, not a work-related one.

I can’t claim home-to-work ...
... travel expenses. Tax deductions can be a complicated thing. Generally, home-to-work travel expenses are considered private expenses and cannot be deducted from your taxable income. However, if the travel involves transporting bulky equipment and tools needed for your work, you may consider it a work-related expense that you can claim.

I’m studying while working so I can have my education expenses deducted from my tax. Using the same principle in the previous items, you can only claim educational expenses if the course you took is related to your current employment. It should be something that can improve your skills and likely result in an income increase. If you’re studying an entirely different course or program, your expenses for that is not claimable.

My bank or credit card statements are enough proof for my tax deduction claims. In any tax deduction you’re claiming, you need to show evidence that you spent money for something, that something is related to your work, when did the purchase happen, and from which supplier. These are details not found in bank statements.

I wouldn’t be audited again if I was audited last year. The Australian Taxation Office may audit you if they find discrepancies and errors in your filing. Once you’re audited, they will be keener to scrutinise your taxation documents. You shouldn’t be complacent. Instead, you must ensure that your return is truthful and error-free.

I can do my taxes on my own. People tend to ignore hiring professional services, thinking it would cost them more. In reality, tax experts can help you maximise your tax savings and even prevent you from getting audited.

Make Filing Your Tax Return Easier

Don’t let tax myths hinder you from minimising your taxes and maximising your net worth. At Tax Ideas, you’ll get the help you need from experienced and knowledgeable tax experts so you can design and execute your unique tax strategies well.

Have you got concerns related to your tax return? Call them on 02 8318 1545 or fill out their online contact form at https://www.taxideas.com.au.