Those rushing to receive a quick refund could cop a shock for being too quick…

Red light for taxpayers rushing to receive a quick refund, who could cop a shock for being too quick

July 9, 2017 5:06pm

Anthony KeaneNews Corp Australia Network

THERE has been a big jump in the number of Australians rushing to grab a fast tax refund, but there’s a potential sting.

Tax specialists warn that being quick off the mark can result in costly errors because Australian Taxation Office technology is likely to spot undeclared income.

Annual payment summaries from employers are not due until July 14, while the ATO’s pre-filled data such as bank interest and share dividends may not appear on electronic returns until mid-August.

RELATED: How to claim money working from home

ATO figures obtained by News Corp Australia show that about 300,000 individuals and tax agents lodged electronic returns in the first week of July, up 20 per cent on last year.

“More than 20 per cent of lodgements have been via a mobile device,” ATO assistant commissioner Kath Anderson said.

Ms Anderson said the ATO contacted about 350,000 people each year about errors in their tax returns.

ATO assistant commissioner Kath Anderson said many tax lodgements last week were on mobile devices.

“One of the most commons mistakes we see is people forgetting to declare all their income,” she said.

“We know that taxpayers like to get in early and lodge in the first month of tax time, but our analysis shows that if you lodge in July you’re far more likely to make a mistake by leaving out some of your income.”

Ms Anderson said people should remember to include all income including wages, interest and dividends, income from the sharing economy, government payments, income from cash jobs and capital gains.

RELATED: Tax deductions without receipts

Almost four out of five of the nation’s 13 million-plus individual taxpayers receive a tax refund, averaging more than $2500.

Deakin University department of accounting associate professor Adrian Raftery said understating income was the biggest issue at tax time.

Deakin University’s Adrian Raftery said there was nothing worse than owing money you’ve already spent.

“My advice would be to wait unless you are absolutely certain that you have correctly recorded your income in your lodged tax return,” he said.

Dr Raftery said people who had changed jobs should make sure they had all their PAYG payment summaries “otherwise you will get a nasty surprise once the ATO catches up with you”.

“The ATO’s data-matching systems are getting better and better as they add more agencies to their long list of sources. They are aware of share and property sales for capital gains tax purposes.”

Dr Raftery said people who didn’t declare all income and were caught would receive a please explain letter from the ATO “plus and amended assessment down the track, usually with penalties attached”.

“Hopefully you haven’t spent all of the original refund when you have to pay back the shortfall to the taxman. There’s nothing worse than having spent money that isn’t yours and there is knocking at the door asking for it back.”

 

6 Super Superannuation End Of Year Strategies

With June 30 approaching, it’s time to make some smart decisions that could boost your future retirement income – and benefit you financially today.

Build your retirement nest-egg with these six tax-effective EOFY super strategies¹.

1. Get more from your salary or bonus

If you are an employee, have you thought about salary sacrificing? You could sacrifice part of your pre-tax salary or bonus into super – and you could potentially reduce the tax you pay by up to 34%.

2. Make tax deductible super contributions

If you’re self-employed or don’t work, you won’t get super from an employer – but that doesn’t mean you can’t contribute yourself. And if you do, you may be able to claim your contribution as a tax deduction.

This deduction also applies if you’re earning less than 10% of your income² from eligible employment and you contribute to your super.

3. Make after-tax contributions

Do you have an investment in your own name, such as shares, property or a managed fund? If you cash out the investment and put the proceeds into super, you could reduce the tax you pay on your investment earnings by up to 34%.

4. Manage your Capital Gains Tax through super

Does less than 10% of your income² come from eligible employment? If you’re planning on selling an asset this year – say, a property or shares – and you make a capital gain, you might want to consider investing some or all of the sale proceeds into your super.

This way, you may be able to claim some or all of the contribution as a tax deduction to reduce the assessable capital gain and the amount of tax you have to pay.

5. Get the government to chip in

If you earned less than $51,020² this financial year, and at least 10% of that amount was from your job or business, you should think about making an after-tax super contribution. If you do, the government may also chip in up to $500.

6. Boost your partner’s super – and reduce your tax

If your spouse earns under $13,800 per annum, consider making an after-tax contribution into their super account. Not only will they have a bit more cash put away for life after work, but you may receive a generous tax offset of up to $540.

Ask your adviser. Mr Tax Refund works with experienced Financial Services Firm Purple Circle. Call us today on 1300 943 410.

We can help you decide on the strategies that work best for you – so get in touch with us before the financial year ends.

¹ Super strategies should be used in consideration of contributions caps. Penalties may apply if these caps are exceeded.

2 Includes assessable income, reportable fringe benefits and reportable employer super contributions. Other eligibility conditions apply.

 


Is your tax return late? Do you have several tax returns to lodge at once?

Is your tax return late? Do you have several tax returns to lodge at once? Use the simple form here to get started and we’ll do all the hard work for you.

For some of us, lodging a tax return every year can be difficult, and some of us just plain forget, but lodging a tax return annually is the law for most taxpayers in Australia.

The truth is it’s never too late to lodge a tax return. If you haven’t lodged your tax for a few years or you have a return outstanding it’s ok as long as you lodge voluntarily and don’t owe any tax to the ATO. (If you do owe tax then you could be up for penalties interest etc!)

The strange thing is that up to 1.5 million Australians annually don’t lodge a tax return – countless because they mistakenly don’t think they will get a refund. A large volume of our clients had not lodged tax returns for many years and were due sizable refunds. One of our recent clients was pleasantly surprised to hear he was due over $30,000 from 9 years of unlodged returns.

The average tax refund issued last year was $1,800 which would tend to indicate there are literally billions in unclaimed refunds Australians are missing out on simply because they don’t bother to check or don’t know how to check what they are entitled to.

Don’t be one of them. Talk to us about getting your prior year returns in asap – use the form above to get started. Mr Tax Refund specialises in the lodgement of multiple year tax returns. We help people just like you every day. Even if you are many years behind we can look after you. Our low fee structure and maximum refund guarantee ensures that you get the best possible outcome – more cash in your pocket.

But do it now, there is absolutely no reason to wait, and you could be missing out on some serious cash.

When (really) is your tax return due?

Around May every year hundreds of our clients ask us ‘when exactly is a tax return due?’

It depends. There are various dates throughout the year for businesses and individuals.

In most cases, if you are an individual and one or more of your previous year tax returns were outstanding on 30 June last year, or, have been prosecuted for non-lodgement of a return then it was due on 31 October last year.

Sometimes the ATO will advise prosecuted clients of a different (usually earlier) lodgement due date. If you do get a letter informing of a specific date we strongly advise to meet that deadline.

If your latest tax return results in a tax bill of $20,000 then your return is due on 31 March 2017.

Tax returns for all remaining individuals who are represented by a registered tax agent are generally due on May 15 2017. In some cases, a short extension may be applicable but not past early June.

Even though we’ve seen fines of over $1000 for those who missed deadlines, if you appoint a Registered Tax Agent now then we can usually reverse or reduce any fines or penalties. For more information check out the full ATO due dates here.

Mr Tax Refund is Australia’s Favourite over-the-phone Registered Tax Agent. Our Dedicated Tax Consultants get you the biggest refund possible for the lowest fees. We can lodge your individual tax return/s after a quick phone call that can be organised during the day, later in the evening or even on the weekend.

Here’s what our clients say about us.

Thomas Dent

I have been using Mr Tax Refund for a few years now and they have consistently delivered the best and easiest tax returns I’ve completed. After years of seeing an accountant in who overcharged and made me feel uncomfortable around my earnings and purchases, and always delivering low returns, the easy phone calls with Mr Tax Refund and good kickback have been a revelation. Big ups.

Call us today on 1300 829 227 or visit www.mrtaxrefund.com.au

7 Daily Hacks to Better Tax Refunds – Day 7 (Use a Pro)

By Stephen Burns, CEO Mr Tax Refund.

Use a Registered Tax Agent to Get the Best Refund

Your Professional Tax Consultant can help you in many ways. They can:

  1. Ensure all available deductions are claimed,
  2. Help you pay the least amount of tax possible,
  3. Respond to any ATO enquiries on your behalf,
  4. Take the burden out of tax preparation.

Over 70% of Australians use an ATO Registered Tax Agent to prepare and lodge their tax return. 

It takes years of study to become a Registered Tax Agent, and constant changes in tax laws mean constant ongoing training.

The added bonus about having your tax return prepared by a professional is that the bill is tax deductible, so the money you spend on a tax agent, you will receive back the following financial year.

Recently the ATO have been pushing individuals to use their free E Tax system. Our clients have reported that the process of using E Tax can be frustrating, confusing and often results in a minimal tax refund.

By seeking help from a tax consultant you can save you time and boost your tax refund. They can also help you to put a personal plan in place to reduce your tax year on year and help you build your income and assets.

Use the services of Registered Tax Agents and Advisors who have deep knowledge of tax and are up to speed on the many changes that happen year on year.

Tax professionals will often find tax deductions and offsets you are not aware of resulting in better tax refunds. They will also minimise any mistakes that could hold up your return (and your refund) or even trigger an audit. (Audits are no fun, and can be expensive!)

Want more tips? Check out out our whole Ebook here.

7 Daily Hacks to Better Tax Refunds – Day 5 (Income Protection)

By Stephen Burns, CEO Mr Tax Refund.

If you’re single and earning over $90,000 or over $180,000 as a couple you will be charged the Medicare Levy Surcharge if you don’t have private health insurance. The surcharge can be over $1,000 a year (2% compulsory Medicare Levy plus 1% extra Surcharge).

Instead of paying this money, you could invest in private health insurance. Some health insurance policies cost less than $1,000 per year and this way you know you are privately covered for any unexpected medical issues.

 

If you are earning under $90,000 as a single or under $180,000 as a couple then the Medicare Levy Surcharge does not apply to you.

Check your Medicare Levy Surcharge rate with the Private Health Insurance Rebate Calculator.

Income Protection Insurance

We constantly hold ourselves accountable to provide for our families and to plan for the unexpected. No matter how hard we try to keep on track by staying out of harm’s way and being healthy there are too many things we can’t control and risks we can’t avoid.

Income Protection Insurance provides you and your family with an income if you get sick or injured. It’s also tax deductible so should put more cash back in your pocket around tax time.

Your tax consultant will be able to help you claim the cost of the premiums you pay against the loss of your income.

×       You can’t claim life insurance, trauma insurance or critical care insurance premiums.

There are a few more things you should know about what you can’t claim on your Income Protection Insurance so it’s best to speak to a professional tax consultant.

Want more tips? Check out out our whole Ebook here.

7 Daily Hacks to Better Tax Refunds – Day 4 (Donate!)

By Stephen Burns, CEO Mr Tax Refund.

If you are passionate about a charity or cause, then the best thing you can do is support them by donating! You automatically feel good from contributing and another great part is that if it is a registered charity, you may be able to claim some of the donation as a tax deduction.

As a general rule, most medical foundations and overseas aid charities are registered, while most churches and building funds are not. Otherwise you can:

  • Ask the Charity directly – they will be able to tell you
  • Check online; visit ACNC (Australian Charities and Not-for-profits Commission)

The ACNC website has information about over 54,000 charities.

Every donation over $2 to a registered charity is tax deductible and you don’t need a receipt if it’s below $10. If the donation exceeds $10 it’s best to ask for a receipt. If a tax consultant is completing your tax return, you can tell them about which charities you donate to and they can handle it from there.

What you can’t claim.

×       Charity membership fees

×       Raffle tickets

×       Any expenses incurred from attending a charity event

×       Donations to a non-registered charity

×       A donation that results in your getting something of value in return

For a full list of what you can’t claim just contact us.

Want more tips? Check out out our whole Ebook here.

7 Daily Hacks to Better Tax Refunds – Day 3 (Use a Logbook)

By Stephen Burns, CEO Mr Tax Refund.

Do you use your car for work-related purposes?

If you use your car for any work purposes e.g. driving between jobs or locations, you may be able to claim the appropriate expenses as a deduction.

Most people use the cents-per-km method which does not require a logbook. Under this method this tax year you can claim a maximum of 5000km at 66c per km.

You do not need written evidence to show how many kilometres you have travelled, but the tax office may ask you to show how you worked out the kilometres claimed.

If you travel over 5000 km for work purposes (an average of about 96 km a week) then the car logbook method will likely give you a better refund – especially if you have a medium to large vehicle.

  • You need to keep a logbook for 12 weeks in a row.
  • The 12-week logbook covers you for 5 years of claims.
  • It must include all work-related trips and personal trips.
  • Your claim is based on your proportion of business use. That’s the percentage of kilometres you travel in your car for business.

The ATO have created a MyDeductions App that you can download and use throughout the financial year. This means you can log your work-related car trips electronically from your phone! There are also lots of third party Logbook Apps where you can log your travel on your phone using GPS data, and then email that report to yourself or straight to your accountant.

You may prefer to manually write down your work-related trips so we’ve made it easier for you by providing a FREE downloadable log book here. Just print out as many pages as you need.

Want more tips? Check out out our whole Ebook here.

 

7 Daily Hacks to Better Tax Refunds – Day 2 (EOFY Sales!)

By Stephen Burns CEO Mr Tax Refund.

Tax Time is 7 days away. In an effort to reduce the tax season headache we thought we’d give you some daily short hacks as a countdown to tax refund time.

Hack 2: See if you’ll benefit from the End-of-Financial-Year sales

Ever wonder why companies like Officeworks have end-of-financial-year sales in June? It’s because they know that people ‘stock up’ on stationery and supplies just before June 30 to claim the expense straightaway.

If you’ve had a pay rise during the year, you might have bumped up to a higher tax bracket. A tax bracket is the amount of tax you pay according to your income. The aim would be to claim as many deductions as possible to ensure you drop down into the lower tax bracket, so jumping into the end-of-financial-year sales is a massive YES.

Work out which tax bracket you fall into from the tax table below. This will determine whether or not you should buy or delay before the end of the financial year.

Tax Rates 2015-16 Source: ATO

If your income is higher or the same as last year, you might be better off buying tax deductible supplies as it could move you down into a lower tax bracket.

If your income (and tax) is lower this year and you expect it to increase next year then it’s better to hold off until next year.

It’s important to speak to a tax consultant about which tax bracket you fall into for the year and the effects of purchasing supplies or stationery in the end-of-financial-year sales.