With tax time around the corner in Australia, fellow Australian accountant and registered tax agent Masoud Habibian of HabibianTax.com suggests that preparing early makes all the difference. Officially, tax time starts July 1 and ends at the end of October. Habibian advises taxpayers to begin assessing their tax lodgement as soon as possible to ensure an easy filing experience.
Taxpayers who draw income from multiple avenues should plan to prepare their taxes accordingly. Each new stream of income only increases the headache. By comparison, those with only one income stream find it much quicker to complete their tax return. They have fewer variable work-related expenses to juggle as well.
An often-overlooked part of the preparation stage is to ensure your statement personal details are up-to-date in your myGov account. Ensure that it is connected to the Australian Taxation Office (ATO). Habibian highlights that providing a smooth myGov account setup process is key to deliver a smooth tax experience.
“Make sure that you have a strong verification [system] in your myGov. If it is actually working, and it has been linked properly, [and] you’ve got access to it,” – Masoud Habibian
He has warned taxpayers to ensure their bank account details and personal information is up to date in myGov. Good documentation has always been important, especially for anyone making work-related deductions. Taxpayers need to keep better track of work-related purchases such as tools, uniforms, and equipment.
There are two different ways to claim deductions for working-from-home expenses. Taxpayers can either gather detailed information about their expenses incurred while working remotely or provide the total hours worked from home to the ATO.
“Sometimes it might be a bit time-consuming to find the detailed record of a daily log of the hours that you worked from home, and also evidence of the expenses like electricity, internet, and phone,” – Masoud Habibian
Taxpayers can look for this prefilled information to be ready for tax return lodgement by mid-July. Employers and banks will lodge their first bits of data to the ATO in that timeframe. This prefilled data makes the lodgement quicker and easier.
Habibian highlights the importance of separating personal expenses from business expenses, stating, “Separating your personal [expenses] from the business expenses would be highly important.” Filing it under the right category will make taxes a lot easier and reduce the chance an error occurs.
Taxpayers should remember that if receipts or any other key document is not provided taxpayers risk difficulties when it comes to lodgement.
“A common issue we see is missing receipts or documents, especially for work-related expenses. Make sure that you’re storing the receipts digitally,” – Masoud Habibian
Whether you’re a seasoned crypto trader or someday hope to be one, it’s important to get the complete picture. Mandatory Reporting Even in a trading loss, every activity is required to be reported to the ATO.
“If you have crypto that is in the radar of the ATO, you need to gather information about it … If you are trading crypto, you must report it even if you have made a loss,” – Masoud Habibian
Though many taxpayers will likely be scrambling to file on July 1, Habibian strongly cautions against this habit. He warns that bringing in documents too early can create needless complications.
“Many people rush to lodge on the first of July … But you should avoid loading these documents too early,” – Masoud Habibian
