The yearly deadline will be here before we know it, and we will all be faced with the yearly task that we have come to know and love – lodging our tax returns! It seems easy enough to prepare tax returns on our own, so when we are very busy with all of our other daily activities, we often feel that we have the time as well as the expertise to do this ourselves. However, everyone should be well aware of the five common mistakes that people make on their tax returns, so that you don’t have to face the consequences of simple errors, such as penalties, or even a delayed or smaller refund. Lodging an inaccurate return can cause many problems for you. Let’s take a look at these all too common errors that are often made, and discuss how these errors can negatively affect you.
Mistake 1 – Different or Misspelled Names
While you may not think that the spelling or accuracy of names is extremely important, keep in mind that they definitely matter when it comes to tax returns. Remember that people change their names for different reasons. If you go by a shortened version of your name, it is easy to erroneously write that on your return. Or, if you are newly married, and haven’t legally changed your name, yet you put your married name on the tax return.
This could delay the processing of your tax return, so it is important to be mindful of the spelling of names, and ensure that you are using your proper name when preparing your tax return. Remember to use the same name and spelling that you have registered in order to avoid this common mistake. It is also important to remember that you must include your spouse’s name when preparing your tax return.
Mistake 2 – Not Knowing What Deductions You Are Entitled To
We all know how difficult it can be to stay
Without receipts to document all of your deductions, the Australian Tax Office will only allow you to claim $300.00 for work expenses. It is highly likely that you are entitled to more than that amount.
Mistake 3 – Not Declaring Overseas Income
It is extremely important to remember to claim all income on your tax return, including income that you have earned overseas. If you work in another place for part of the year, you may not be aware that you need to lodge a return. The truth is, that you do. Always remember to declare overseas income by lodging an Australian tax return each year if even you have earned any type of foreign income, including employment or investment income, pensions, annuities, and more. It is important to declare all of your earned income when you lodge your tax return. If you have more than one job, it may be easy to forget, but keep in mind that the Australian Tax Office is aware of all the money earned.
Mistake 4 – Inaccuracy on Tax Returns
You must be accurate when preparing your tax return! When you are entering your amounts for income, deductions, and paid taxes, you may be tempted to estimate the figures. Remember that this is a huge mistake and something that you should always avoid. The Australian Tax Office keeps detailed records so that they can always compare what you have entered onto your tax return. Never guess what the entered amounts should be, or put in incorrect amounts. If you are missing information regarding the amounts you should enter, take the time to find out the exact numbers rather than guessing or estimating, as this can be an extremely costly error.
Mistake 5 – Forgetting to Include Bank Interest
This is a common mistake that is very easy to make! Often times, we only remember to include income that we have earned from our job or place of employment, and we unintentionally forget to include earned bank interest on our tax return. Any money that you earn during the year from bank savings accounts needs to be included. Forgetting to include bank income often results in your return being significantly delayed.
Not all mistakes are intentional. Without using a professional accountant to prepare your tax return, you may be making errors that are costing you a lot of money. An accountant is aware of all potential deductions that need to be included, and he or she will make sure that your tax return is free from any kind of errors, even those you may not be aware of! The Australian Tax Office makes an effort to identify any mistakes, so you want to make sure that you are aware of common errors. An accountant has the expertise to prepare and lodge your tax returns with as much accuracy as possible so that you can enjoy timely processing and the highest return possible.
FTA Accountants Pty Ltd has two convenient locations in Maroochydore and Roma to serve you. We have a professional and positive attitude and provide a number of services to meet the needs of all our clients. If you have any questions or would like more information regarding how we can help you, contact us today.