The 3 main reasons you might be selected for an ATO audit
Each year, the ATO reveals what they will be targeting when it comes to tax returns.?But these aren’t the only reasons you may be selected for an audit.??The last thing anyone wants is to be audited, so what are some of the most common reasons you might be selected for an ATO audit and how can you avoid it?
1. Claiming deductions you’re not entitled to
As tempting as it can be to claim everything that Dave at the pub said you could, it may end up costing you.?Each industry and occupation has its own allowable deductions, so just because your mate can claim something, it doesn’t mean you can.?While some unusual deductions are allowed,?including garden gnomes and dogs, it is your responsibility to know what you can claim and what you can’t. If you have a good tax accountant they will be able to advise you on this and help you maximise your claim.??
Be careful not to exaggerate your deductions either.?If your deductions appear excessive in relation to your income, this may give reason to be selected for an ATO audit.
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2. Not declaring all of your income
The ATO has some of your tax return form already prefilled which makes it easier than it used to be. However, it is still up to you to ensure the details are correct.
Capital gains from property and shares, undeclared foreign income, understating or omitting bank interest and not declaring all business sales (e.g. cash in hand income) are some of the common mistakes with declaring income and are reasons you might be selected for an ATO audit.
Be sure to keep accurate records of all your income and expenses, proper proof of everything and make sure you list it all on your tax return... Read more