Preparing for your tax return can often seem like a tedious chore, but if you fall for these common misconceptions the task can be even harder. Let’s bust some common tax myths.
Paperwork picture from Shutterstock
Myth: You need to keep paper copies of documents
Reality: Electronic documents — whether those are scanned from paperwork or in digital form from the start– are entirely acceptable as records for tax purposes. Here’s the confirmation direct from the Australian Taxation Office (ATO):
Documents that you are required to keep can be in written or electronic form. If you make paper or electronic copies they must be a true and clear reproduction of the original.
Like paper records, electronic records relating to tax need to be kept for five years after your assessment, but in practice there’s no reason not to retain them permanently. Check out our roundup of the best scanners and cut down on the paper clutter.
Myth: You can only run E-tax on Windows
Reality: This was true in previous years, but for 2012/2013 there is a version of the Tax Office’s E-tax package for Macs as well. Definitely worth considering if you don’t use an accountant.
Myth: Salary sacrificing a laptop makes sense
Reality: While you can salary sacrifice laptops and other items, there’s much less advantage in it than there used to be. The rules are complex, and your employer has to agree to it (since they’ll often have to pay fringe benefits tax on the gear).
Myth: You have to register for GST if you make more than $50,000 as a small business
Reality: $50,000 used to be the threshold, but it was raised to $75,000 in 2007. In practical terms, it may make sense to sign up regardless (some businesses are reluctant to deal with other businesses which aren’t GST-registered), but it isn’t a requirement. Another change to note: items under $6000 can now be written off in the year of purchase rather than depreciated.