Preparing Individual Tax Returns: Wait for Accurate Filing

Tax season is here, and while you may be eager to file your individual tax return, it’s crucial to exercise patience.

The Australian Taxation Office (ATO) needs time to collect information for the last financial year. Therefore, it is recommended to hold off preparing your returns until the end of July at the earliest.

Waiting allows the ATO to pre-fill your tax return with data from employers, banks, and government agencies. This saves time and ensures accuracy in reporting your income, deductions, and other financial details.

Delaying also gives you the opportunity to gather all necessary documents, such as payment summaries, bank statements, and receipts for deductions.

This comprehensive approach minimises errors and ensures you claim all eligible deductions, maximising potential refunds or reducing tax liabilities.

The ATO announces their focus for tax returns

The ATO has identified rental properties as an area prone to errors and non-compliance. Through data-matching capabilities, they cross-reference information provided by individuals with third-party data. Any discrepancies or omissions in rental income reporting can trigger ATO audits or reviews.

To navigate the ATO’s focus on rental properties, individuals should pay close attention to the following:

  • Declare all rental income: Even if the property was rented for only part of the year, it must be included in the tax return.
  • Claim legitimate deductions: Deductions can help reduce taxable rental income, but they must be valid and directly related to the rental property. To claim deductions accurately, you will need to provide supporting documentation.
  • Be aware of capital gains tax (CGT): Selling a rental property may attract CGT. To have accurate records we need to know about when your rental property was acquired and made available for rent.

Examples of supporting documenation to prepare:

  • Depreciation reports
  • Loan (mortgage) statements
  • Insurance invoice
  • Property agent’s summaries
  • Receipt and invoices for repairs and maintenance
  • Rates, water, and related utility bills.
  • Purchase contract
  • Lawyer and real estate agent invoices
  • Renovation and repair invoices
  • Date the property became available for rent.
  • Date the property was first rented.

Alchemy Accountants provide both bookkeeping and accounting services to a range of industries. If you are looking for a bookkeeper/accountant that understands your business, please reach out to us. If you only see your accountant once a year, it may be time to find a new one.

We will work closely with you towards business success. Contact us for a FREE consultation.

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