Hmm.. this is something I have been running into so much lately that I feel it needs addressing.
Firstly – comparing your tax situation with another person is usually like comparing apples and bananas- there are too many things that can make a difference- many people get extra tax withheld, or may have offsets and exemptions, have lots of children……the list is exhaustive.
But – if your co-worker is on exactly the same wage as you and has exactly the same kind of situation as you and gets thousands of dollars more back in their annual tax refund than you did- chances are they are lying to the ATO.
People claim 5000 kilometres of vehicle travel when all they do is drive from home to work and back again. Not deductible
People claim for clothing that is non-deductible. They claim their phone and a host of other things that are not always fully deductible.
The ATO has finally figured out that it isn’t huge multinational corporations that are leaving a deep hole in tax revenues- it’s millions of Australians claiming things like travel to work and ordinary clothing!
People claim massive capital costs on their investment properties as repairs. I had a call once from a client who said that his work colleagues were putting extensions on their houses from huge tax refunds and why did I not get him an extension too? He sacked me and went to their accountant- he wanted that extension, and apparently, it just wasn’t fair that he was missing out.
Our tax system works on self-assessment – you lodge your tax return and, unless it’s so outrageous that its red-flagged immediately, the refund gets paid – no questions asked.
Remember – it’s usually two years later that the tax office goes back and looks over returns- and that’s usually when people get caught out.
The tax office has some fairly solid big data, collected over many years, on the types of deductions someone working in a specific occupation will claim, and a benchmarking range that it considers reasonable. For example- if you are a retail assistant and claim travel, phone and shoes…it will get picked up as out of scope for that job.
So- just because you get away with it this year doesn’t mean it won’t come back to bite you down the track.
Yes – I agree that paying a dollar more tax than you have to is madness- but taking money that’s not yours to take is simply self-serving greed. If your neighbour took hundreds or thousands of dollars from your bank account you would be screaming blue murder and demanding justice. The tax pot is our collective account- it pays for our schools and hospitals and roads and public transport and the NDIS and welfare and struggling farmers and a whole lot more.. We can whine all we want about the government wasting taxpayer funds, and of course they do, but that doesn’t mean it’s every person for themselves. Surely- we are better than that?
We are all in this together- claim what you are entitled to- no more, no less. If you want a bigger tax refund- make an appointment, and we can do some tax planning. If you’re not sure what you can and can’t do – find out! Keep good records and keep your receipts.
You can’t dial up the tax return you think you deserve/need just because your rego is due or the cat needs an operation, or you have to have that new handbag. Our collective account is hundreds of millions of dollars short because of that attitude.
Think about it.