ATO Tips To Get Ready For Tax Time

Tax time can be stressful for many people, but it doesn't have to be. You can do some simple things to get ready for tax time and make the process easier. This blog post will discuss some tips to help you get ready for tax time. Keep reading for more information.

The Australian Taxation Office (ATO) encourages taxpayers to start getting prepared for tax time well ahead of the deadline. You can do a few things now to make the process easier and ensure you claim all the deductions you're entitled to.

Are you one of the many people who wait until the last minute to do their taxes? If so, don't worry; you're not alone! The good news is that there are some things you can do to make tax time a little less stressful. This blog post will provide some tips for getting ready for tax time. So whether you're a first-time taxpayer or doing your taxes for years, these tips will help make the process a little easier.

The Australian Taxation Office (ATO) has released some tips to help people get ready for tax time. The ATO urges people to start gathering their paperwork and get online lodgement ready.

So, if you're looking to avoid a last-minute rush, it's best to start getting organised now! In this blog post, we'll take a closer look at the ATO's tips and provide some helpful advice on how you can get prepared for tax time.

Once you have everything together, it's time to start preparing your tax return. Don't try to do it all yourself – there are plenty of online tools and resources that can help make the process easier. And if you have any questions, don't hesitate to contact the ATO. They're happy to help!

So get started today, and you'll be done in no time.

1. MyTax Makes Your Life Easier

Using our online tax return lodging tool, myTax, you will find that preparing your tax return has never been simpler. myTax was introduced a year ago and only asks questions that are pertinent to the individual's living situation. It also incorporates information that is automatically provided by employers, banks, government agencies, and other third parties.

myTax is now accessible to anyone who receives income, tax offsets, or deductions through superannuation pensions, lump-sum payments, managed investment funds, or international pensions. This year's expansion makes myTax available to a wider range of taxpayers.

In order to use myTax, you will first need to create an account with myGov and then connect it to the ATO.

People who filed their taxes electronically in 2015 were among the first to have their notice of assessment and tax receipt delivered directly to the inbox of their myGov account.

To begin, you can submit a new online non-lodgement advice form or an online refund of franking credits form if you are exempt from filing a tax return for the current tax year.

2. Get App-Y

We are aware that individuals are using their mobile devices, such as smartphones and tablets, for more and more of their day-to-day activities. Because of this, we have made it possible to access myTax through the ATO App.

You can use the ATO app to watch the status of your return and, if necessary, discover how soon you can pay off tax debt with a payment plan. These features are in addition to the broad variety of additional options that are available through the app.

The ATO app will soon have a new deductions function, which will allow you to record work-related expenses, gifts and donations, as well as the costs of maintaining your tax affairs while you are on the go in preparation for Tax Time.

You can get the ATO app from the Apple App Store, Google Play, or the Windows Phone Store to download on your mobile device.

3. Benefit From Discounts for Small Businesses

If you are qualified for concessions such as an immediate write-off for assets or quick deductions for prepaid expenses, you may be able to minimise the amount of money that you owe in taxes.

You could also be able to save time by estimating the worth of your trading stock rather than performing a stocktake. This could help you make better use of your time. Visit the ATO's concessions at a glance page to learn more about the various exemptions and deductions that are available.

4. Pre-Fill Facilitates Access

For the purpose of pre-filling tax forms, each year, employers, banks, government agencies, and other third parties provide us with more than 600 million individual pieces of data.

For many individuals, all that is required of them is to check the information that we have pre-filled for them, enter any deductions that they have, and then click the "submit" button.

If you are able to hold off on filing your tax return until early August, when we anticipate receiving the majority of the pre-fill information, the process should be even more streamlined, swift, and uncomplicated.

5. Don't Forget About Deductions

We are going to take measures to guarantee that no one is deprived of the deductions to which they are legally entitled. Because of this, we have compiled some straightforward tips explaining the most popular deductions, so that everyone can figure out what they are eligible to claim and what they are not:

• Costs related to vehicles and travel, including commutes to and from the workplace and other trips
• Costs associated with clothing, laundering, and dry cleaning
• Donations of Money and Goods
• Expenses from working from home
• Deductions for interest, dividends, and other types of investment income
• Costs associated with one's own education
• Tools, machinery, and various other assets
• And other deductions.

6. Be Sure to Keep in Mind These Three Guidelines While Filing for Deductions

You should be able to deduct a significant portion of the expenditures associated with operating your firm. However, it is also essential to keep in mind the following three golden guidelines in order to ensure that you are only claiming what is really yours:

• This must have been an investment in your company rather than a personal expense on your part.
• You are only allowed to deduct the amount of the expense that was utilised for your business, even if it was partially used for personal reasons as well.
• You are required to keep documents in order to validate the expense and demonstrate how you calculated the business-related component of an item.

7. Calculate Your Motor Vehicle Expenses Correctly

The organisational structure of your company and the kind of automobile you drive both play a role in determining the approach you choose to computing the costs associated with your vehicle. For instance, if you run your franchise as a single trader or partnership and the vehicle in question is a car, you have the option of utilising either the cents per kilometre technique or the logbook method to determine how much you should pay for fuel.

If, on the other hand, you run your franchise as a business or a trust, you won't be able to employ any of these ways; rather, the only way you'll be able to deduct costs will be to do so based on receipts. Visit the ATO's page on motor vehicle expenses for additional information.

8. Submit a Tax Claim for Your Home-Based Business

You are eligible to take tax deductions for the portion of your house's expenses that are relevant to the operation of your business if your home has served as your primary place of business (for instance, if you have utilised your home as your primary place of business because of the coronavirus). How and what you can claim is also impacted by the structure of the firm you run. Visit the ATO's page for home-based businesses to learn more.

9. Describe Your Entire Income

Include all of your revenue on your tax return, whether it came to you in the form of cash, coupons, EFTPOS transactions, internet, credit or debit card purchases, or income from other platforms such as PayPal, WeChat, or Alipay.

You could also have revenue from the assets of your firm, from other operations related to your business, or from capital gains. You will be able to better monitor both your turnover and your cash flow if you take the time to accurately record your income and expenses and if you keep meticulous records of both.

10. Get Your Facts Right

Over the course of each year, on average, we reach out to more than 350,000 individuals whose tax returns contain errors. The omission of income is the error that we encounter most frequently. As a result, it is imperative that you declare all of your income, including compensation from second employment, income from foreign countries, interest from bank accounts, and any payments from the government.

The majority of the other frequent errors that we come across are simple to correct. You may avoid any unneeded delays by performing a quick check to ensure that all of the facts on your tax return are accurate and complete before you submit it. The following are some common mistakes that should be avoided:

• Providing a TFN that is not correct.
• There are several typos in your name.
• Providing inaccurate information regarding one's bank account.
• Instead of giving your full date of birth, just provide us the year you were born.
• Failure to complete the income test and provide facts about the spouse
• Making several submissions of a return for the same year.
• Utilising the Additional information schedule in an incorrect manner.

If you wait for the information that you pre-filled online to come through, booking your lodging online can help you prevent numerous potential problems.

11. Overclaiming Can Be Expensive

In spite of the fact that we want to make sure that no one is denied their deductions, we will also be on the watch for anybody who tries to claim more than they are really eligible for.

This year, we are concentrating on exceptionally high claims for work-related expenses across all different types of businesses and professions.

Because of advances in technology and the increased utilisation of data, we are now in a position to take a considerably more comprehensive approach than in years past. This allows us to discover and evaluate claims that deviate from what is typical across all fields of work and occupations.

In addition to this, they are going to pay special attention to claims:

• That has already been reimbursed by the employers, and
• Help cover personal costs such as getting to and from work, for example.

You may ensure that you are not overclaiming on work-related costs by adhering to the following three simple rules:

• It appears that you have used the money on your own,
• It needs to be in some way connected to your employment, and
• You are required to have a record to back up your claims.

12. Keep Track Of Losses So You Can Claim A Deduction For It Later

Due to the exceptionally difficult conditions that prevailed throughout the course of the past year, it is possible that many companies will report their very first annual loss. In most cases, if your company operates at a loss, you can "carry forwards" that loss and use it as a basis for claiming a deduction for your company in a subsequent year. Your company's organisational structure will determine how you can make a claim for a tax loss. Visit the page on the ATO website devoted to business losses for further details.

13. Know What To Do If You Take Money Out Of Your Company Or Use Its Assets

If you withdraw money from your firm or use company property for personal reasons, you are required to report these activities in the appropriate manner and to keep adequate records.

Depending on the method you used, you may be subject to additional record-keeping and reporting requirements (for example, through your salary, a fringe benefit or a loan from the company). Visit the Division 7A page of the ATO for further information.

14. Report Jobkeeper In Your Business Tax Return

Payments received from JobKeeper are considered taxable income and must be reported on tax returns. If you are a sole proprietor and have received payments through JobKeeper, for instance, you are required to include such payments as revenue from your firm on your tax return.

Imagine that you have a partnership, a trust, or a company for your business, and that JobKeeper has sent you payments. You do not need to include it as income that can be taxed on your tax return; but, you are required to declare it as part of the income from your firm.

Your employees who have received JobKeeper payments won't have to do anything different since the payments will be included in their regular income statement that you present to them as their employer. This means that they won't have to worry about missing out on any potential benefits.

15. Know What Has Changed

There have been certain changes that could have an impact on your taxes this year, in particular:

• The tax offset for workers over 65 years old has been eliminated, therefore you will not be able to claim it on your tax return.

• If you were given the net medical expenses tax offset in your tax assessment, and only then, would you be allowed to claim it as a deduction on your taxes. You are still able to make a claim for any out-of-pocket medical expenses that are connected to disability aids, attendant care, or aged care if you have paid for these services yourself.

• You are no longer eligible to claim the tax credit for a spouse who is dependent on you. It is possible that you will have to pay additional taxes this year as a result of claiming the dependent spouse tax offset through a withholding agreement that you have with your employer. If you want to increase the amount of money that is being withheld from your paycheck, you will need to make sure that you provide your employer with an updated TFN statement (or withholding declaration).

16. Include Increase in Cash Flow on Your Business Tax Return

As the Cash Flow Boost credits are considered to be non-assessable non-exempt income, you are not required to pay tax on them; however, you may be required to disclose the amount in order to pass other income tests. Again, this varies greatly depending on the structure of your company; therefore, you should consult with your tax agent for further information on this topic.

17. Check to See If All of Your Records Are Accurate And Complete

You are responsible for figuring out what kinds of records you are required to keep and ensuring that those documents are comprehensive and accurate. You are required to maintain the majority of records for a period of five years, store them in a secure location, and ensure that they are written in English (or easily converted to English). For further information, please see the record-keeping page provided by the ATO.

You may also use our record-keeping evaluation tool to assist you in determining how well you are keeping the records of your company so that you can make adjustments to improve your record-keeping practises in the future. You can find this information on the record-keeping review page provided by the ATO.

18. Incidents That Can Be Easily Repaired

The worry that they would make an error in their tax returns is one of the factors that discourages people from completing them. On the other hand, we are aware that the vast majority of errors that appear on tax returns are done so by accident. Fixing them is typically a simple process, and there are rarely any consequences for doing so.

In the event that you make a mistake by accident and it turns out that you owe money to the ATO, you will be required to pay the tax that you owe but there will be no penalty assessed against you. On the other hand, if you make a mistake that causes you to be owed money and it turns out that you are entitled to such money, we will pay it to you along with any interest that you are entitled to receive.

If you have made an error on your tax return, the best course of action is to alter it using the online options that are available to people.

19. Get Organised by October 31

If you intend to finish your return, you must submit it by the October 31st deadline in order to avoid incurring penalties.

20. Age-Old Advice For Using A Tax Agent

The vast majority of registered tax agents are permitted to continue to file returns for their clients after the October 31st deadline due to the availability of special lodgement schedules.

If you are considering employing a tax agent for the first time or a different one than you did the previous year, it is imperative that you get in touch with them before the month of October is over so that you may avoid getting penalised and qualify for their lodgement dates.

It is also essential to be certain that you are working with a tax agent who is registered with the government. Your tax return can only be prepared for a fee if the preparer is a registered tax agent. On the website of the Tax Practitioners Board, you may find a list of tax agents who are registered with the board.

21. Get Professional Assistance If You're Having Cash Flow Issues

A healthy cash flow indicates that you are able to pay your bills on time, as well as fulfil your commitments regarding taxes, superannuation, and employers. You can determine your likely cash situation at any point in time by preparing a cash flow projection, which can be done. Learn about the procedures that the ATOs use to control the cash flow page.

You can also chat to a licenced tax expert about managing your cash flow, and they can assist you in working through our cash flow coaching kit. Another option is for you to manage your cash flow on your own.

22. Take Good Care of Your Mental Health

When things are difficult like they are right now, it is more vital than ever to take care of yourself and the people you care about. In order to support small business owners and their mental health, the ATO provides material that may be accessed here.

My Business Health, the web portal maintained by the Australian Small Business and Family Enterprise Ombudsman, is another resource that may be accessed online for useful advice.

If you are having trouble paying your tax and superannuation responsibilities, the ATO is able to assist you to design a personalised payment plan and defer payments and lodgements if necessary.

23. Request Assistance If You Need It

The ATO is eager to collaborate with you to find solutions to problems before they become more serious. It is never too late to talk to them about the situation.

Visit the link on the ATO website titled "reconstructing your tax records" if you have been impacted by COVID-19 or another natural disaster, such as a drought or a bushfire, and require assistance with reconstructing your records.

You can get in touch with the ATO if you need some additional assistance with your tax and superannuation matters; alternatively, your registered tax professional is available to help make it easier for you to get your tax and superannuation matters in the right order.

Tips For Staying Safe Online During Tax Season

1. Log in to myGov regularly to check your tax messages

• Scammers frequently utilise the tactic of impersonating trusted companies such as the Australian Taxation Office (ATO) or myGov. This is done, in particular, to try and coerce consumers into paying phoney tax debts or handing over personal information in order to receive a refund.'

• Logging onto your official myGov account on a regular basis to check your taxes, file your returns, and determine whether you owe money or are eligible for a refund will help you avoid being a victim of tax fraud. It would be helpful if you manually put in https://my.gov.au/ into your internet browser rather than clicking any links in emails or text messages because those links could be dangerous links.

• In addition, at any time you can verify the status of your tax matters by phoning the ATO at the toll-free number 13 28 61 or by getting in touch with your tax agent.

2. Your MyGov account security code should be activated

• Having a robust password for your myGov account is a good beginning step, but adding a security code to your login procedure offers an additional layer of safety. This makes it more difficult for a hacker to proceed even if they crack your password and gain access to your account.

• When you check in to myGov, you will be given a security code in the form of a number that will be transmitted to your mobile phone. This code provides a quick and secure way to access ATO online services.

• Sign in to your myGov account and navigate to the "Account settings" section to activate your security code and set it up.

3. Be discreet with your sensitive details

• In order to receive a refund from the ATO, you will never be required to disclose any personally identifying information.

• Please don't give out your Tax File Number (TFN), date of birth, or bank details unless you've verified that the person you're dealing with is who they say they are and actually needs these details. If you're unsure whether or not the person you're dealing with is who they claim to be, it's best not to give out this information.

4. Think before you click

• You will never get an email or text message from the ATO that has a hyperlink that takes you to a page where you may log in to use their online services.

• You should always make sure the person you're working with is who they say they are by consulting an objective source, such as the yellow pages or an internet search engine. Never use the caller's contact information or the message they sent to you in any way, shape, or form.

5. Never pay taxes using Bitcoin, iTunes, or gift cards

• You will never be asked by the ATO to deposit your tax debt into a bank account that is not associated with the ATO, pay for it with iTunes, Google Play, or any other prepaid card, or pay it with a cryptocurrency such as Bitcoin.

• Paying back taxes the right way requires that you get guidance from the Australian Taxation Office regarding your available payment choices.

6. Utilise social media wisely

• We are so accustomed to divulging our private information over the internet that we no longer stop to consider who might be able to access it.

Be mindful of what you post on the internet and in social media, as con artists may use this information against you if they attempt to contact you in order to make their scheme seem more plausible. They are also able to piece together personal facts that you provide online in order to attempt to crack your passwords on essential sites, such as your myGov account.

• Make sure that only friends can see the facts you provide on social media by adjusting the privacy settings on your accounts.

• Don’t share your Tax File Number (TFN) on social media.

7. Be careful when using WiFi

• When you are connected to a hotspot or free public Wi-Fi, you should exercise extreme caution with the activities that you engage in online. When connecting to a public Wi-Fi network, it is acceptable to check the news or the weather; nevertheless, you should avoid conducting any financial activities, such as filing your tax return. Because these networks are not secure, it will be much simpler for hackers to obtain the information they seek from you.

• Make sure that your private Wi-Fi network is protected with a robust password before beginning any tax-related transactions from the comfort of your own home or from the office of your business.

8. Update your devices regularly

• If you are notified that a security update is available for your operating system or one of your apps, you should not dismiss the message; rather, you should instal the update as soon as you can. These updates do not only consist of the addition of new functionality. In addition to this, they aim to patch vulnerabilities that fraudsters use in order to gain access to your device.

• It would be beneficial if you also performed routine anti-virus scans on your device, as this will assist you in locating and removing any malicious software, often known as viruses.

• It is a best practise to uninstall any applications that you are no longer using to protect your data from being accessible by businesses that you are no longer doing business with.

9. At tax time, protect your company's information

• Cybercriminals are able to perpetrate tax fraud in your name using information such as your AUSkey if they have access to it. Be wary of anyone who asks you to "confirm" your details, and under no circumstances should you give over your information until you have verified that the person you are interacting with is who they claim to be.

• If you, as the owner of a business or as a tax professional, have become aware of a data breach or a breach of client records (for example, the loss of or unauthorised access to sensitive personal details), you are required to notify the ATO in order to have protective measures put into place for client accounts.

10. Help others stay safe online!

• Warnings against internet scams issued by the ATO and ACSC should be spread amongst family, friends, customers, and coworkers to help keep these groups secure.

• Send suspicious emails purporting to be from the ATO to the email address ReportEmailFraud@ato.gov.au in their entirety, and then delete the original email after you have sent it. Avoid opening any attachments, clicking on any links, or downloading any files.

• ReportCyber is another option for communicating concerns regarding online safety and security.