Individual Tax Return Myths

Below are some of the myths I am encountering when preparing my clients' 2012 tax returns:

1. The first year a person does the tax return, they get all tax paid back. Not true. Your tax refund depends on your income and tax paid not whether it's your first year tax return or not.
2. I use my car to travel to work so I can claim for that. False. You can claim only if you use it for work and not travel to work. So if you use your car to see your customer or travel from one office to another, etc then you can claim for the use of your car.
3. I can claim all my university fees in my tax return. Half true. You can claim for courses you do but they have to be related to your current job.
4. I can claim for my children's education in my tax return. Nopes you can't. Schoolkids Bonus (formerly known as Education Tax Refund) is not part of your tax return any more, its managed by Centrelink.
5. I am on call and need my phone to get shifts so I can claim the phone in my tax return.  Totally untrue. You can only claim for phone if you use it for actual work, say to call your clients, etc.
6. I work in an office environment and need to wear a suit so I can claim it in my tax return. Sorry but you can't. Unless it is part of uniform with a logo, you cannot claim it.
7. I flew interstate for a job interview and I want to claim it in my tax return. Unfortunately you can't claim that. Any expenses incurred in getting a job are not claimable in your tax return.
8. I was fined for not lodging a tax return on time last year and I want to claim it in this year's tax return. You can't claim fines and penalties in your tax return.

There may be other myths going around but the above are what I have encountered so far this year. Also note that the dependent spouse tax offset has been further restricted this year.

BY SURESH RAJANI

Suresh Rajani is the Business Leader at Tax First - an accounting and business advisory firm located in Wayville, South Australia.

 

 www.taxfirst.com.au