Big Aussie Expat Tax Errors
Tax Services Australia provides specialised, expert support to Australian expats living and working abroad. We even have a dedicated website for Aussies abroad.
Often we need to help ‘unscramble eggs’ for taxpayers who have lodged tax returns which are wrong. Lodging an incorrect expat tax return can almost invite the ATO to further scrutinise and even audit their overall tax arrangements, and we need to step in before problems arise. For some, it seems too hard, and they just avoid lodging at all.
So what are some of the mistakes Aussies make, when lodging their Australian income tax returns? Here’s just a small sample:
they lodge their tax return as a non-resident and report the spouse to whom they are happily married to, but they lodge as a ‘resident’ – normally, a couple will be resident in the same country or they should have a very good reason;
they report their foreign income, earned whilst non-resident;
they report they are resident;
they do not complete a ‘change’ of residency disclosure, in the year this occurs; they also forget to update medicare levy exposure that also changes with residency changes;
they do no tax planning, so for example they do not consider tax preferences around the deemed disposal of certain investments when ceasing residency, or deal with any other issues that may have significant tax implications and even benefits for them;
they live overseas for a shorter time than expected, and assume they are ongoing residents of Australia for tax purposes (a dangerous assumption)
they report their franked income from Australia – or fail to report the income they earned prior to ceasing their residency.
Lodging a tax return as a non-resident is a minefield of potential errors and missed opportunities. The best way to avoid ATO scrutiny, is to lodge a full and correct income tax return in the first place.
So if you are an Australian expat who needs help with these or similar matters, make sure you get expert help from a professional that knows what they are doing.
And you might even want to check out our dedicated website, Aussie Abroad Tax.