Important: Top 5 tax myths busted

Thursday, 4th July 2019

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Tax season can be a confusing time, but there is no reason for you to get caught out this year. We have gathered five of the most common tax myths to help you stay out of trouble. Myth #1 &ndash; I will always get a tax refund You are not always entitled to a return. The return you receive each year is based on the amount of tax you or your employer paid over the preceding financial year. If the amount paid for the financial year was estimated too high against your salary and deductions you are entitled to a refund. If the amount of tax paid was underestimated you may need to pay. In many instances, you will get a refund, but it isn&rsquo;t always the case. PAYG taxpayers do not automatically get a tax refund at the end of the financial year. You can always speak to your ITP consultant to see whether you are eligible for a tax refund. Myth #2: I get refunded for all my deductibles You won&rsquo;t necessarily get back all the money you spend on deductibles, safety clothing for work, work meals etc.&nbsp; You will only be entitled to the amount that is left after your deductions are taken from your total income. This means if you are left owing the tax department after your taxes are calculated the refund you could have received is instead used to reduce the amount owing to the government.&nbsp; Myth #3 - I don&rsquo;t need receipts for my tax return In order to claim a deduction, you need a receipt to prove you spent the money. You can&rsquo;t simply use a bank or credit card statement because often this doesn&rsquo;t include all of the information needed for the tax department &ndash; such as the items you purchased. Any total claim equalling more than $300 will need receipts attached to make your claim possible. To be safe make sure you keep all your receipts if you intend to make a claim. Having trouble keeping track of your receipts and documents? Download the ITP app, scan in your receipts and never lose track of another claim. Myth #4 - I can claim all my travel expenses even if I was only at a conference for a few days You can only claim your travel expenses related to your work &ndash; so this means you can&rsquo;t claim any parts of your trip that were a holiday. Any receipts provided with multiple and mixed items can still be used but must be annotated to show which items are work related and which are personal.&nbsp; #5 - I can claim my work clothes because I need to wear a certain colour Just because your boss has told you to wear black to work, this doesn&rsquo;t mean you can claim on your work clothes. Unless your clothes are a unique uniform you&rsquo;ve had to purchase, you cannot make a claim. If you have any questions or queries or just need a myth debunking, make an appointment to see an ITP consultant today.