Two-thirds of Australians are confident about grappling with the tax implications of the pandemic. Maybe too confident.
Off the back of new research into Australian attitudes ahead of tax season, H&R Block has warned consumers not to be overconfident about navigating their taxes in 2021.
The study found that one in three Aussies believes that the implications of COVID-19 will make completing their tax return even more complicated, with as many as 25 per cent admitting they will consider switching to a professional tax agent for this year’s return, rather than the myTax portal.
As for what Aussies plan to do with their returns, according to the research, 44 per cent expect to put the extra cash into a savings account, while 25 per cent said they’d use it to pay off outstanding debt.
Surprisingly, 52 per cent of surveyed Australians expect that they will not receive a tax refund that is larger than the one they collected in 2020.
While the majority of Australians do not consider themselves confused about filing their tax return this year, 32 per cent expect the ATO to apply more scrutiny than usual in the wake of financial trends like cryptocurrencies and working from home.
“Australians who have done well on the sharemarket, with property or even with bitcoin during the past year face being audited if they get their returns wrong. Australians can face a 25 per cent penalty for carelessly miscalculating how much they earned from shares, investment properties, and now cryptocurrency,” Mark Chapman, director of tax communications at H&R Block, warned.
“Those who have entered a new phase in life, whether starting their own business, buying a rental property, buying some shares or investing in cryptocurrency, need to review their income and deductions and consider the tax implications in order to stay out of trouble with the taxman,” he said.
For their part, the ATO has recently moved to warn Australian crypto investors to lodge capital gains and/or losses correctly.
“While it appears that cryptocurrency operates in an anonymous digital world, we closely track where it interacts with the real world through data from banks, financial institutions and cryptocurrency online exchanges to follow the money back to the taxpayer,” Assistant Commissioner Tim Loh said.
“If you realise you’ve made a mistake and correct your return, we will significantly reduce penalties. However, failing to report on crypto assets and not taking action when reminded will prompt penalties and potentially an audit.”
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Article by Fergus Halliday on June 01, 2021 – nestegg.com.au