With tax time coming to an end and with the Taxation Office extending the deadline to 31 October your receipts' are now more valuable than you may think and excuses like 'a mouse ate my receipts' or 'my pants were stolen' are just a few other stories the ATO receives annually, will not help you
Keeping your receipts' can be a pain and with lots of bits of paper floating around and being lost or washed away in the rinse cycle these annoying slips are the best way to provide the ATO with accurate deductions and proof if you ever need to justify your tax return.
The ATO is cracking down on deductions and it is critical that you do your research on what you can and can’t deduct and those little bits are key to your return. Store them in a shoe box, file them in folder system (preferably sorted into categories to assist when deciding what to deduct) but keep them. You brush your teeth daily, take out the bins each week or watch your favourite TV show daily then get into the habit of storing your receipts.
Here are a few key points to consider. • The deadline for Australians who want to self-lodge tax returns is October 31 is less than 2 weeks away; • The ATO says the deadline will only be extended in "extenuating circumstances"; • Individuals who use a tax agent to file their returns have a few months left to lodge.
The ATO gets some truly creative excuses around tax time as to why someone has lost their records, missed the tax return lodgement deadline, or over claimed on deductions. For those who do not lodge on time, the penalty can be as high as $1,050 — almost the value of the latest $1,080 tax cut that millions of Australians are receiving. The ATO has released $20 billion in tax refunds so far this year. It said about 10 million individuals lodged tax returns every year. It has so far received 8.7 million lodgements, which means it is still waiting for about 1.3 million individuals to lodge. About 75 per cent of Australians do not file their own tax returns and prefer to lodge with registered tax agent. The deadline for most individuals with simple tax affairs who do not owe hefty tax bills and who use a tax agent is May 15.
Here are 4 typical excuses from taxpayers.
Number 1: 'My pants were stolen' One taxpayer said a thief had broken into the car and walked off with uniform pants. The taxpayer had kept their receipt in his pocket and couldn't provide a record of their purchase.
Here’s a thought, Go digital, you should ideally keep digital records of all claims you intended to make and it will also make claiming just that little easier.
Number 2: 'Holiday brain' A taxpayer claimed they had gotten "holiday brain" after returning from a trip and had forgotten to lodge their tax return. Think about it this way, if you do your return accurately and efficiently the return might help pay for that next holiday, now would that be nice.
Number 3: 'Mice eating my receipts' Missing receipts is one of the most common reasons Australians did not lodge, or lodged incorrectly. The taxpayer claimed that a mouse had broken into their car and eaten their receipts. Funny thing is mice don’t eat receipts. Always check with the seller to see if they have a record of your transaction and remember, ATO may ask taxpayers to substantiate claims at any time, even up to five years after the return is lodged.
Number 4: 'The car wash did it' Receipts left in cars is a frequently cause taxpayers strife. If you are going to wash your car put receipts in the glove box and after its clean and you get home open take the time to get into the glove box and gather the slips you might be surprised that with a little effort could come a better reward.
Notes to keep in mind:
· The ATO's online lodgement service "myTax" let individuals lodge returns for 2016 onwards. Most of the information you will need to complete your tax returns will be pre-filled for you, including payment summary and health insurance information.
· Penalties may apply for those who lodge late. Last year that about 475,000 taxpayers who completed their own return lodged late. The penalty for failing to lodge is $210 for every 28 days that your return is overdue, up to a maximum of $1,050. Not everyone who lodges late would get that penalty — the ATO does not apply it in all cases, but would normally be where people had repeatedly ignored the ATO's requests to lodge.
Note this is an edited story: credit goes to Nassim Khadem ABC news reporter, read the full story here.
Find out more about your Tax obligations. Visit captaxation.com.au