10 tax tips to ensure you avoid getting red-flagged by the ATO


This tax season the ATO is coming after those who fudge their annual returns, sometimes helped by their tax agents, including claiming for expenses that have nothing to do with work.

The ATO estimates these taxpayers are costing to system to the tune of $8.7 billion a year — more than large corporates which are estimated to be underpaying by a combined $2.5 billion.

To avoid getting red-flagged by the tax office this year, Liz Russell, senior tax agent at Etax.com.au has provided Business Insider with a list of ways to ensure your tax return is up to scratch, preventing any nasty penalty fees or interest charges.

Here they are.

Declare all of your income

This includes allowances, Centrelink, Uber, Airtasker and other gig jobs.

“The ATO knows about the money you received from Centrelink or earned on those occasional Uber rides and Airtasker jobs,” says Russell.

Be careful claiming all ‘receipt-less’ deductions to the maximum amount

This includes work-related deductions to $300, laundry expense to $150 and car expenses for 5,000 kilometres.

“The ATO is paying special attention to work related deductions this year,” says Russell.

Ensure your work-related deductions are in line with industry averages

“The ATO benchmarks all people in the same occupation against each other,” says Russell.

“If you’re claiming much higher deductions than average, the ATO might take a closer look.

“That doesn’t mean you shouldn’t claim all of the deductions you’re entitled to, but you should always make sure you have evidence to support your claims.”

Clear any existing ATO or other government debt

“If you have an existing debt with the ATO, or Centrelink or the Family Assistance Office, or any other Government agency, your return may be delayed as the ATO will often use your tax refund to pay down these other agency debts,” says Russell.

Update your personal details

“If you’ve changed your name since you last lodged a tax return (for example, if you’ve gotten married and changed your surname), and you haven’t told the ATO, your return could be delayed while they verify your identity, as your name no longer matches their records,” she says.

Make sure your employer has submitted your PAYG

“When your tax return is received by the ATO, they check the income information matches the data provided by your employer,” she says.

“If your employer doesn’t submit your PAYG to the ATO, then they don’t have a reference point to check against and can sometimes delay your return.”

Tie up loose ends

“If you’ve been dragging your feet and have old overdue tax returns to lodge, the ATO can sometimes delay processing of your return while they wait for you to get your affairs up to date.”

Include all capital gains events on your tax return…

“If you’ve sold shares or a rental property, and didn’t declare it on your tax return, the ATO might flag your return for a closer look,” Russell says.

“Part of the ATO’s sophisticated technology allows it to data match with other government agencies and financial institutions.”

Your spouse’s details…

“If you have a spouse, you need to include their details on your tax return.”

And bank interest

“If you make any money from bank savings accounts, it needs to be included on your return,” Russell says.

“Leave it off and you run the risk of delays with the ATO.”

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