Naughty Claims and Non-Disclosures
In our previous post we talked about taxpayers under claiming their legitimate work related deductions.
Here we will look at under reporting, or failing to report, other critical items.
Whilst the ATO make a lot of noise striking fear into people who need to claim work related deductions in their income tax return, very little is ever said about other major omissions from income tax returns or other errors that often have much greater tax consequences.
not reporting CGT results from the sale of shares or managed funds;
not correctly determining the cost base of investments that are sold;
not reporting the partial CGT exposure for a home sale, for which the ‘full’ main residence exemption cannot be claimed;
not reporting your spouse (or your de facto spouse). For example, this can mean incorrect Private Health Insurance tax offsets are calculated;
not reporting ‘deemed disposals’ of assets, such as when ceasing tax residency;
not reporting ‘exempt’ foreign employment income, even where it still needs to be shown to your income tax return.
We suspect there is a much great tax impact of the above errors, than any ‘over claim’ of work related expenses.
Sometimes, you need to know where to look.
And sometimes, you need to think not just about what you want to claim, but what might have forgotten to include.