Millions of people do their tax return by themselves. There was a warning from the ATO for those taxpayers about the traps that are very costly this year. As the tax return season is nearing, very few people have considered about using a financial expert’s help for filing tax returns.
According to the report from the ATO, 2.8 million people have filed for returns through e-tax and 9 out of 10 tax returns were filled with discrepancies and have been adjusted, last year. 400 thousand people were contacted about these discrepancies. If an individual files the return without any problems, it would be issued within 12 days. In case of discrepancies and errors, it would take a longer time.
Spelling mistakes in name, error in date of birth, bank account number and other personal details rank the first, when it comes to the discrepancies. The ATO requests the people to recheck their details before filing the returns. It is said that incorrectly filing the insurance or bank account details would delay the tax return.
The online tax return option automatically adds income from the bank and the investment details. However, the information is available only if the banks or employers have provided it on time. Thus, when an individual relies on the automatic option for filing the tax returns, he should know that the information would be incomplete. If he had received any extra money, due to this incomplete information, he would be charged to return back the money with an interest.
Other mistakes include errors in lodging, travel expenses, claiming work clothes that do not have the logo and lodging the returns, late. For these errors, the taxpayers would be charged with 20% to 100% of the tax, based on the severity of the mistake. The ATO has the power to go through all the records and spot dodgy tax claims. The other mistake is not claiming what can be claimed. People do not want to get into problems by claiming everything and want to stay away from problems. This would cause a loss for the people. Calculation errors, wrong decimal points, transposing figures and other mathematical problems would cause big effect.
To avoid all these problems, the ATO has requested the people to use the help of financial experts like the auditors to check the tax return claim before filing it. People sometimes files weird things as work related expenses like dresses, cat sitters, ironing boards, hand creams and others. It is better to get an auditor check the returns to avoid any embarrassing problems.