Myth vs Fact – Unicorns or Tax?

Tax Myths

Have you ever watched that show Mythbusters? They take common myths and try and prove them to be true or just Myths. Someone really should make one about tax.

Often I hear ‘someone told me’ or ‘my friend thinks’, or the best line ‘someone down the pub told me’. The best person to ask is your Tax Agent. Not your friend at the pub.

In this blog I’d like to review a few tax myths I have come across in my 15 years experience.

Myth or Fact – You can claim $300 without receipts.

This is a great one and here’s what the ATO say about it:

“If the total amount you are claiming is $300 or less, you need to be able to show how you worked out your claims, but you do not need written evidence.”

So it’s partially true, you do not need written evidence (eg receipts), however you still need to be able to explain how you came to the $300.

Myth or Fact – You can claim travel expenses for your Investment property.

Well this one used to be true, but from 1st July 2017 the tax laws were changed and now it is not deductible.

Myth or Fact – You must lodge your Tax Return by 31st October. 

This is such a common one and the ATO does promote this myth by advertising around 31st October. If you lodge your own tax return via myTax it does need to be lodged by 31st October each year.

However, if you use a Tax Agent you get an extension, generally until 15th May the next year. Some taxpayers get a shorter extension, but generally the due date is 15th May. Another great reason to use a Tax Agent.

Myth or Fact – The Tax system is a self assessment system.

This is a big one for me, as many people don’t realize that you as a taxpayer are ultimately responsible for you tax return, and or whats included in it.

Obviously you are most likely going to use and rely on a Tax Agent for their expertise, but ultimately you are responsible if you misstate something on your return.

This is just three common myths about tax. There is so many more. So many more that another blog is needed. Stay tuned for Part 2!

If you need help busting any tax myths, get in touch today.