Tax Audit
Unfortunately, not every individual does what’s right when it comes to dealing with tax returns. To ensure everything remains on track, the ATO reaches out to over two million taxpayers yearly to assess their review, even though not all of them will be subjects of a comprehensive audit. Full-scale ATO tax auditing can be a hassle for any company, irrespective of size. To avoid the problem that comes with an audit, here are some smart things you should do:
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Ensure Your Tax Returns Are Logged On Time
Always stay in charge of your tax returns and give yourself lots of time to lodge your documents properly. This reduces your chances of making any mistakes. This way, you will be less likely to encounter scrutiny when you later submit your tax returns. There are also processes you can follow to file your income tax return even after the due date.
Analyze Your Numbers
This isn’t the most exciting task to carry out in a business but regularly inspecting your numbers is a great way of ensuring everything is accurate before you lodge your tax returns. It can be easy to make several mistakes here. And that’s why hiring a tax agent is the best way to ensure that all the boxes are ticked because an experienced accountant will immediately detect any errors and bring them to your notice.
Be Extra Careful With Records When Dealing With Cash
Certain industries and jobs rely more on cash payments. This is fine, however, you have to ensure you are keeping accurate records of every transaction. The Australian Taxation Office focuses more on cash-based companies. Working mostly with cash will put your business under their radar. Avoid any problems created by relying more on cash payments by being more vigilant with financial records to show that you aren’t under-declaring your business’s income.
Declare The Deductions That You Are Entitled To
When filing your business’s tax returns, there are several deductions that you are qualified to claim, even though it differs majorly depending on your industry or occupation. If you hire and work with a tax accountant, they will be able to highlight any deduction you may have missed when filing your tax return so you can get a refund. Note that you should only claim authorized deductions, and you must have documentation or receipts to corroborate your claims.
Clarity Is Key
Making sure each tax claim you make is easy and clear to understand is a vital tip in aiding you and your company to evade a tax audit. If the ATO can understand your claims easily, they will most likely not have any reason to follow up. However, if there are lots of suspicious and vague claims in your returns, then they will certainly return to get more information and possibly more evidence to help your claims.
There are lots of individuals who claim to be experts in tax returns. However, as much as everyone needs some help with their tax returns, never forget that in the end, you are the only one responsible for your tax returns. No one wants to be audited and by taking some simple and meticulous steps, you can significantly lower your chances of receiving that dreaded call.
