Are you paying taxes right?

Tax time has officially commenced in Australia. However, before you rush in to it, there's a few things that you need to keep in mind to keep the ATO off your back.

Online tax services more powerful than ever

In July last year, the Australian Taxation Office (ATO) announced updates to its lodging services to make paying tax transparently as easy as possible for businesses and sole traders across the nation.

"We are lucky in Australia that when it comes to tax, the vast majority of people want to do the right thing," said Assistant Commissioner Graham Whyte. "We also know that the easier we make it for people to lodge their tax return, and manage their affairs, the more likely they are to get it right the first time."

With vastly expanded capabilities, the e-tax tool is being replaced with a new MyTax service. This helps people both prepare and file their tax obligations, but it also ensures that any potential non-compliance won't slip through the cracks.

"We want people to claim what they are entitled to – no more, no less," said Mr Whyte. "If your claims are substantially higher than others in similar occupations, earning similar amounts of income, a message will appear, asking you to check them."

What can trigger a tax audit?

We are generally told that the ATO randomly audits companies each year, but there are a few things you can do to increase your chances of being put under the searchlight.

Various things signal to the ATO that an operation should be investigated – many of which you won't be notified about prior to filing your taxes online. For instance, while you will be notified if your company's financial performance is radically different to the industry benchmark, if you have been in the papers or if employees have complained about not receiving superannuation payments, you will not.

Poor record keeping or making mistakes on your tax return will also suggest that something murky might be going on. At the same time, if you are audited, this can make the process far more time-consuming and costly. Therefore, proactively managing your taxes by working with a professional can ensure any red flags are taken down before you make a lodgment to the ATO.

If you are worried about the potential for an ATO audit or have even received notification that one is impending, then you'll likely need some professional advice about how to mitigate the consequences. If you take the lead in managing the issue, then the repercussions are greatly reduced – so get in touch with WMC Accounting today to iron out any uncertainties before they become problems.