Tax time is stressful, and it can be tempting to just quickly do up your tax lodgement yourself so you can get your tax return and start spending.
However, rushing leads to errors, and errors in tax claims can be very, very expensive. The Pen, your friendly tax accountants in Sydney, have seen the consequences of DIY lodgements time and time again. Every year we have to break it to people that they now have a tax debt due to mistakes of the past, so we always recommend making an appointment with qualified tax return accountants. Here are a few mistakes the accountants at The Pen come across all the time.
Typical Misconceptions About Tax Time
We understand that deductions and claims can be confusing. The Pen’s personal tax accountants in Sydney studied and worked in finance and taxation for years to understand all the ins and outs of income tax, so don’t feel bad if you get a little lost in the tax jargon. Here are a few misconceptions we hear quite frequently.
- “If I’m working from home, I can claim back on household costs regardless of what hours I work,”. Unfortunately not. You can only claim home office costs for your regular work hours each day, so if you decide to work later, you can’t claim that. You can make your claim based on actual costs that you will need to prove or you can claim a set rate per hour to cover air conditioning, electricity, furniture, carpets, etc. Currently, the set rate is around 52 cents per hour.
- “I use my phone and internet for work, so I can claim the whole bill,”. We’re going to go out on a limb and say that you’re not using your phone and internet for work 100% of the time. You need to work out how often you’re using various devices for work and figure out what percentage of your bill you can claim. We recommend having a log book where you can track phone and internet usage. It’ll make it far easier to claim the maximum amount.
- “I can claim $150 for uniform costs without a receipt, so I’m going to do that even though I don’t wear a uniform,”. It’s true; the law does allow you to claim $150 worth of laundry and ironing costs for an eligible uniform without receipts. But the key word people overlook is ‘eligible’. An eligible uniform is one that is mandatory with a company logo on it or a uniform required to perform your job such as a chef’s uniform.
- “I studied a course that will help me get a promotion, so I can claim the costs,”. Unless the study is directly linked to your current income-earning activity, you can’t claim it. You can’t claim for career progression.
The 5 Most Common Mistakes People Make On Their Returns
According to the Australian Taxation Office, here are the 5 most common mistakes to avoid come tax time.
- Forgetting to keep receipts. If you plan to claim an expense, you have to have a receipt to prove the purchase.
- Leaving out a form of income. If you exchange goods or services for money, that is considered work and you are obliged to pay taxes on that work. Even cash-in-hand work needs to be declared.
- Not paying for something and claiming it anyway. If you didn’t cover the expense, you should not be reaping the tax benefits from that expense.
- Claiming personal expenses for rental properties. Quite often individuals will try to claim interest on loans used to purchase cars or boats by pretending the loan was used to pay for their rental property. Likewise, you can not claim deductions for a rental property if you are living in it.
- Claiming deductions on personal expenses. Unless you have spent personal money to do your job, you can’t claim taxes on it. This includes home to work travel, normal clothes, or personal phone calls and internet usage.
The Benefits Of Hiring Tax Accountants In Sydney
If you’re still thinking you should do your taxes by yourself, consider the long list of benefits that comes with hiring professional tax return accountants in Sydney.
- No nasty surprises. When you organise to have your The Pen lodge your tax return, you can guarantee there’ll be no tax debts or fines in your future. We’ll ensure you’re aware of existing debt as well, so you can make plans to pay it off.
- We cover all tax claims. Whether you are lodging individual, sole trader, or business returns, The Pen’s tax return accountants can take care of it all.
- It saves you time. You’re a busy person, and you don’t have a few hours lying around to worry about tax return forms and documentation. Instead, forward everything to us and we’ll take care of it all for you. That way, you can go back to working on your business and spend your spare time on things you love.
- Maximise your returns and deductions. The Pen’s personal tax accountants in Sydney are the experts at maximising your tax return. We’re across everything you can and can’t claim, and we’re here to make the process seamless, efficient, and simple.
- Gain insight into your business. The team at The Pen are more than just tax accountants in Sydney; we’re also able to offer professional business growth advice and guidance. After we’ve looked over your business finances and lodged your return, we may have some insights and advice for your business that you hadn’t previously considered.
For The Best Tax Return Accountants In Sydney, Call The Pen
The Pen are renowned for our financial advisory services, commitment to clients, and professional tax return accountants in Sydney. We’re proud to be the first choice accounting firm for Sydney creatives, and we’re dedicated to providing support, tax advice, and financial strategies to those brave enough to chase their dreams in the creative industries. If you’re after a firm who specialise in creative agency accounting that will understand your passion, your drive, and your determination, look no further than The Pen. Contact us today to organise a consultation and find out what we can do for you.