Tax time gets tougher — know the rules and get extra cash

COMPLETING a tax return is getting more complex as Canberra’s constant rule changes frustrate everyday Australians.

23/05/2011 NEWS: Model in generic photo with mountain of paperwork at end of financial year at tax time for submitting taxation return. Pic. Craig Wall

A DOG’S breakfast. That’s what dysfunctional political decisions in Canberra have turned tax time into for millions of Australians.

Less than two months remain before the October 31 tax return deadline, and many of the 1.5 million people who have already lodged online may be nursing a nasty headache sparked by our constantly changing tax rules.

Less than two months remain before the October 31 tax return deadline. Picture: News Corp Australia.

It seems that every government decision, every compromise in Canberra reached by MPs with big egos, creates a pile of extra rules. And that’s on top of a Tax Act that already comprises many thousands of pages.

Private health insurance changes in recent years have added fresh complexity for many people, such as different tax rebates for different family income levels and having to know your spouse’s taxable income before you can finish your own tax return.

Think of a tax agent ... Paperwork can be tough to go through at end of financial year. Picture: Supplied.

Then there’s the jargon. Do you have any attributed personal services income? Or how about some deferred non-commercial business losses? Perhaps you have a “deductible amount of UPP of a foreign pension or annuity”. And, by the way, a “low value pool deduction” has nothing to do with swimming in summer. Still with me?

Certain to be of help ... The ATO’s main online lodgement option, etax, is straightforward to use, with prompts that walk you through your tax return step-by-step. Picture: Supplied.

You can’t blame the Australian Taxation Office for the increasing complexity. They’re simply trying to enforce what government legislation tells them to. The ATO has simplified things this year with the introduction of the streamlined MyTax software to complement its popular etax system, but even MyTax has a long eligibility checklist.

It’s enough to make you want to throw your hands in the air, shout “stuff youse all” and swear off tax time forever.

However, that’s the last thing you should do, because a majority of Aussies can receive a tax refund each year and many are legally entitled to much more than they claim. And, of course, there’s the rule that says we have a legal obligation to pay our share of tax.

Despite the complexity created by politicians, the ATO’s main online lodgement option, etax, is pretty straightforward to use, with prompts that walk you through your tax return step-by-step. It has lots of links and guides showing what you can and cannot claim.

There are plenty of tax deductions available — particularly for investors — that can put more money in your pocket. If you’re unsure, see an accountant or tax agent who is trained to track down everything you are entitled to.

Don’t over-claim, because ATO technology has improved greatly in recent years to catch cheaters. But don’t fear the taxman’s wrath if you make an honest mistake. They won’t throw the book at you over a simple misunderstanding.

The ATO’s staff, like most of us, know that it’s increasingly hard to keep up with — or make sense of — many of the decisions coming out of Canberra.

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