Australians whose work costs are significantly higher than their peers could get into trouble with the law.
Unlike last year, the Australian tax authorities are spending more time checking claims thanks to an increase in telecommuting costs, raising the risk of being caught filling out unreliable returns.
With less than a month to the end of the fiscal year, Mark Chapman, H&R Block’s director of tax communications, said the tax office had computer software available to catch those getting creative with their claims.
“Self travelers using the ATO’s myTax program are monitored as they prepare for their return by the ATO’s computer systems to ensure they don’t overclaim,” he told Daily Mail Australia.
Australians whose work costs are significantly higher than other professionals can get into trouble with the law. Unlike last year, Australian tax authorities are spending more time checking claims, raising the risk of being caught filling out unreliable returns
Penalties for lying about tax returns
CAREFREE: 25 percent
reckless: 50 percent
AWARE: 75 percent
REPEATED OFFENDER: 95 percent
Source: H&R Block analysis of Australian tax office fines for failing to declare capital gains or making inflated claims
“The ATO’s computer systems compare your claims to those of others like you and if your claim sets off alarm bells, myTax will issue a stern warning inviting you to reconsider that deduction.
“Ignore that message, and you could be heading for an audit.”
Australians risk being fined 25 percent of tax evasion for carelessly misjudging their claims.
A reckless mistake can result in a 50 percent fine.
Deliberate tax avoidance could result in a person being penalized 75 percent of the difference between what he claimed and what he owed.
Repeat offenders risk a 95 percent fine.
“Don’t embellish the deductions,” Mr. Chapman said.
“You can only claim what you’ve spent.
“So don’t increase deductions to get a larger refund, and only claim expenses that you can prove you spent, for example by providing an invoice, receipt, or bank statement.”
If your deduction claims are found to be false, you must repay the evaded tax plus interest.
When filing a tax return, receipts or bank statements were sufficient proof.
The tax office is also cracking down on Australians who fail to declare their capital gains from Bitcoin or any other cryptocurrency
“So if you’ve incurred work-related expenses and you have the paperwork to prove it, don’t hesitate to claim it,” Mr Chapman said.
Since March 2020, the federal government has allowed professionals to claim a flat rate of 80 cents per hour and that will continue until the end of this fiscal year.
But by opting for the lower rate of 52 cents per hour and adding up their phone, internet and electricity bills separately, someone working from home could claim between $2,550 and $2,700, an H&R Block analysis found. .
Those who work from home would typically miss out on more than $1,000 in tax deductions if they opted for the government’s flat rate of 80 cents.
The tax office is also cracking down on Australians who fail to declare their capital gains from Bitcoin or any other cryptocurrency.
Mr Chapman said many investors had the wrong belief that digital currency transactions were untraceable.
Since March 2020, the federal government has allowed professionals to claim a flat rate of 80 cents per hour and that will continue until the end of this fiscal year. Pictured is a woman working from home in Adelaide
“The ATO collects data from Australian data exchanges on cryptocurrency transactions, including the names of people who bought and sold cryptocurrency during the year,” he said.
‘They then match that with tax returns to ensure that all income and profits are correctly reported.
“It is therefore essential that if you have cryptocurrency income and profits that you report it on your tax return, as the belief that cryptocurrency is an anonymous hobby, where the ATO cannot track transactions, is false.”