The way we approach tax matters can sometimes end up making a big difference to our bottom line and stress levels. Here are three tips to help individual taxpayers achieve a better outcome when lodging and dealing with the ATO this tax time.
Tip one: Get help with debts early: If you’re experiencing financial difficulties, there are a number of ways the ATO can assist. If you can’t pay your tax bill, the ATO encourages you to contact them early to discuss your options. For tax bills under $100,000 you can set up a payment plan online through myGov, or through your tax agent. For bigger debts, contact the ATO to discuss a plan.
The ATO has power to provide debt relief from an individual’s tax bill (in part or in full) if payment would leave them unable to afford food, clothing, accommodation, medical treatment, education or other necessities. In 2017–2018, the ATO granted 2,174 full or partial releases.
A good tip for anyone having trouble paying their tax bill is to stay on top of their lodgment obligations. This shows the ATO you’re aware of your obligations and you’ll avoid penalties for non-lodgment.
Tip two: Stay off the ATO’s radar: No one wants to be audited, so it pays to know the following “red flags” the ATO looks for when analysing its vast data sources, and it may help you identify when to seek professional advice: unusually high work-related expense claims; rental expenses, especially those inconsistent with rental income or other ATO data; undeclared capital gains and income; and taxpayers who don’t lodge returns on time!
Tip three: Manage disputes efficiently: There are many options for resolving tax disputes, ranging from lodging an objection, seeking external review, alternative dispute resolution and litigation. However, the ATO wants to resolve tax disputes quickly and fairly. The ATO’s “in-house” facilitation service gives individuals (and small businesses) free access to an impartial ATO mediator who will take the taxpayer and ATO case officers through the issues in dispute and attempt to reach a resolution. It’s a voluntary process and can be undertaken at any time from the early audit stage up to and including the litigation stage.
In all of your dealings with the ATO, we’re here to support you. Whether it’s a tax debt, a disputed assessment or a complicated deduction you’re not sure about claiming, our experts will guide you every step of the way and help you achieve the best outcome.