Here are some tips from our professionals on how best to reduce the likelihood of an ATO audit.
Keep it clear
If there is one thing that the ATO loves more than ‘evidence of claims’, it’s ‘clarity’. Having a complete understanding of why you have claimed deductions, as well as having the evidence for those deductions, will always work in your favour.
Only make claims you’re eligible for
It might not sound obvious, but the number of claims based on previous returns, hearsay, or hope constantly grows. What was claimed before, or what you’ve heard (or believe is deserved), isn’t what makes a legitimate return and the ATO knows this. This is why having a professional who can prudently prepare your return with the latest tax knowledge for every industry and circumstance is not only profitable but smart.
Detailed Records - especially for cash payments
If you get paid in cash, ensure official pay slips are provided by your employer detailing tax-withheld and all entitlements such as leave and superannuation. Not only will it help you in case of an audit, but peace-of-mind that you’re not missing out on anything. It’s amazing how many things can be missed in a casual cash economy.
Making sure you keep track of all digital and physical transactions will always keep the ATO happy. You must have ample evidence that these transactions are accounted for, especially with cash-run businesses, as there is less automated record-keeping with physical currency. If a large part of your business is completed with cash, keeping intricate details (on a spreadsheet for instance) will save you time and money should an audit eventuate. (If you don’t have a bookkeeper, we’d recommend talking to our friends over at Bookkeeping.Solutions to make sure your business isn’t at risk).
Inaccurate and late returns, accidental or not, can attract audits, penalties, and interest on anything overclaimed. It’s real. As it's a legal document there are simply no excuses for preparing a return that has been fudged or forgotten. “You didn’t know” or “I thought it would be ok”, has no weight with the ATO.
Use a professional
One of the best ways to keep your distance from a possible audit is by using an Income Tax professional. Not only can they guarantee a maximum refund, but they can also legitimise your return with the latest industry practices designed to protect you from any audits and questions. Plus, as a client of ITP Qld, all-year support is available should there be any issues raised. Did we mention that using a professional is a tax deduction in itself?
Audits are real, but if you’re prepared, they can just be an unlikely risk. If you’d like to know how you can best prepare yourself and reduce the risk of being audited, why not contact ITP Qld today on 1300 555 773 or try our popular LiveChat to see what the professionals can do for you?