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Protect yourself and your business and learn how to avoid being audited by the ATO

In this article, you will learn how to avoid being audited by the ATO. Australia is a country to consider if you want to do business in the Australasian region, and it is one of the most developed nations in the world. In addition, Australia offers political and economic stability.

On top of that, a booming middle class and a positive attitude towards foreign investment. Allowing multinationals to open up to markets in Asia and the rest of the region. However, multinational executives interested in forming a company in Australia must be familiar with the country’s tax system and thus must work with an accountant in Australia.

Before taking the next step and taking advantage of the business opportunities Australia has to offer, it would help if you first familiarise yourself with the tax system in Australia. It is likely to be very different from the tax system in your home country. For starters, taxes in the country are divided into several categories, but all are collected by the country’s tax office, the Australian Taxation Office (ATO). So after reading this article, you will know how to avoid being audited by the ATO.

Business owner

As a business owner, your responsibility and your company are to pay the correct taxes at the right time. On a monthly, quarterly, or annual basis, take advantage of the tax benefits offered. In addition, you reduce the chances of your company incurring fines or penalties and thus be assured that your business will be in full compliance.

Most people have to file a tax return every year, and your tax return must show all your income and deductions for the year.

The Australian Taxation Office (ATO) uses this information to determine if you need to pay additional tax or a refund (a tax refund).

Tax returns are for the tax year from July 1 to June 30.

If you are going to prepare your tax return, you must file it before October 31. This income tax return must be done in an exact, established time, supporting all income and deductions. In the development of this article, you will find some aspects to follow when filing the income tax return and thus avoid being audited by the ATO. Contact Ingrams Accounting here if you need advice. On how to avoid being audited by the ATO.

Always file your income tax return on time.

Many taxpayers wait until the last minute to file their federal income tax returns every year. Despite this trend, there are several reasons why you should file your tax return early.

If you receive a refund, you may want to file your return as quickly as possible. Keep in mind that there are benefits to filing early. Some of the benefits are faster refunds. Filing on time gives you more time to pay what you owe, get financial information, avoid an extension, and prevent identity theft. Contact Ingrams Accounting here if you need advice. On how to avoid being audited by the ATO.

Review your calculations and check your deductions several times.

Reviewing the calculations is a cumbersome activity. But verifying the numbers is essential as this is a way to file an error-free income tax return. If you want to perform this activity, it is advisable to use the help of a registered tax agent to prepare and file your tax return. They are the experts who will help you include the necessary data and amend any errors in your recovery. Contact Ingrams Accounting here if you need advice. On how to avoid being audited by the ATO.

Claim deductions, but only those to which you are entitled. 

There is a wide range of tax deductions, including donations to Australian charities. Deductions can vary widely, depending on your occupation. It may include uniforms or work clothes, electricity and internet for those who work from home, or travel costs. To claim deductions, you should keep original receipts or invoices for documentation. This is because the premises available may sometimes change from year to year.

You can take deductions for some work-related expenses. Standard deductions include; vehicle and travel expenses, clothing, laundry and dry cleaning, home office expenses, self-study expenses, tools, and equipment.

You must be able to prove, for example, with receipts the deductions you made. You must keep these records for at least five years, and the ATO may require you to show these records at any time.

Contact Ingrams Accounting here if you need advice. On how to avoid being audited by the ATO.

Keep meticulous records.

Keeping original and digital receipts or invoices is vitally important if you want to know how to claim your tax deductions. Still, these should visibly and clearly show dates, supplier details, information about the invoiced items, and cost.

Your meticulous record should include all the income you receive during the fiscal year. That means the money you earned from all your jobs, including full-time, part-time, casual or piece-rate, self-employed, cash.

You should also include money you earned in other ways, including interest from bank accounts, government payments, real estate rentals, overseas investments, stock market dividends. Regardless of how you acquired the income, remember to include it on your tax return. Contact Ingrams Accounting here if you need advice. On how to avoid being audited by the ATO.

Pay special attention to records when carrying cash. 

You should keep a record of all cash paid to you during the year. You can include the amount, name of who bore you, date, and receipts or vouchers if you have them.

It is important to note that if the payment is simply a gift and you did not work to receive it, then you should not include it on your income tax return. For example, money received from your parents as a birthday gift or cash as a Christmas gift. Contact Ingrams Accounting here if you need advice. On how to avoid being audited by the ATO.

The OTA generally monitors cash-based businesses more closely.

But it is easy how to avoid being audited by the ATO by keeping a closer eye on your records to show that you are not underreporting income. The main way to avoid an audit is by not being sloppy in your bookkeeping and keeping good records.

You may also want to consider using software like Xero or QuickBooks to help you stay organized. Another way to avoid an audit is to make sure that you report all of your income. The ATO has several ways to track income, and if they see that you are not reporting all of your income, they may flag you for an audit.

So, it is important, to be honest in your tax return and report all of your income. Finally, if the ATO ever audits you, it is important to cooperate and provide them with their requested information.

If you do not cooperate, you may be subject to penalties. If you have any questions about avoiding an auditor and what to do if you are audited, you should speak to Ingrams Accounting on how to avoid being audited by the ATO.

Clarity is the most important thing.

Every tax return you make is a detailed tax return to understand that you will significantly reduce how to avoid being audited by the ATO. Because the Australian Taxation Office can know what you are claiming and why you are claiming, reducing the likelihood of them following up.

For this reason, it is of utmost importance to make your tax return clear and detailed. One way to make your return detailed is to make a meticulous record of all your income and outgoings as stated above; to make your tax return clear and thus avoid being audited by the ATO, you will need your tax file number(s):

Tax file number (TFN).

  • Bank account details in case any money is owed to you.
  • Income – to prove any money you may have received.
  • Income summaries from all your employers.
  • Centrelink pay statements.
  • Deductions and expenses to prove any deductions you make.
  • Receipts for work-related expenses, donations, or gifts.

If you are filing your tax return online in myTax, you will need your myGov user ID and password. If you don’t have a myGov account, you can create one and link to the ATO at my.gov.au.

The employers, banks, and other businesses give the ATO the details of the people they work with. If you wait until the end of July, the ATO includes this data in your tax return.

Contact Ingrams Accounting here if you need advice on avoiding being audited by the ATO.

This information is general and has been prepared without considering your objectives, personal or business circumstances, financial situation, or needs. Because of this, you should, before acting on this information, consider in consultation with your adviser its appropriateness, having regard to your objectives, personal or business circumstances, financial situation and needs.

Chris Sheppard

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