The Australian Taxation Office has introduced a simple tool for individuals (including sole traders) to lodge their own tax return electronically for free – myGov. In September 2016 the ATO proudly reported that over 2,000,000 tax returns had been lodged via this system, an increase of 37% over the same period last year. myGov is a very handy, well developed system for individuals and includes pre-filled information from several government departments, employers, banks, and investment companies.
Unfortunately many individuals do not have the necessary knowledge to prepare their tax return themselves correctly, and a recent survey showed 70% of myGov users were making mistakes. The most common errors made include putting income into incorrect labels, missing deductions they were entitled to, incorrectly claiming private expenses as deductions, or failing to claim eligible tax offsets they were entitled to. The most common consequence of these mistakes is that taxpayers do not pay the correct amount of tax and have to have their tax return amended and corrected.
To avoid this situation, individuals should carefully read and follow the ATO myGov instructions when preparing their own tax return, use Tax Help Volunteers service (if they are eligible) or use the services of an experienced Registered Tax Agent.
By Yeva Gibson from Success Tax Professionals Kelmscott