How to avoid being audited by the ATO

No one wants to be red-flagged by the ATO.

So let’s look at some common mistakes that you can now look out for to avoid being audited by the ATO.

These tips will help you get organised, stay organised, and lodge your tax return in perfect shape, and on time!

what are the ramifications of being audited?

What does it actually mean to be audited by the ATO?

If you are audited, it can be a real pain, and costly too. There can be long-term impacts to your finances, and in some cases, your mental health.

The process generally starts with the ATO asking you some questions. Ideally, try not to rush into answering the questions unless you are absolutely certain about your responses without referring to your records or consulting your accountant.

Also, try not to panic. Easier said than done, we know. But in many cases, it’s not what you think it is and there are usually several options or steps to mitigate against any review. 

However, where it is warranted the ATO may proceed straight to audit without conducting a review. This may happen, for example, in cases involving less complex issues, or where they suspect fraud or evasion, or where an arrangement or transaction is considered high risk.

If there is an audit, you will be asked to provide a lot of documentation, records, and supportive evidence. All of which will chew up your time and energy.

Doesn’t sound fun does it?

Nope. Which is why we recommend you use our Online Tax Shop. In the meantime, we have put together the following tips to help you avoid getting audited. Don’t make these mistakes…

How to avoid being audited by the ato

Make sure you declare ALL income

I know it seems incredible to think anyone might just ‘forget’ about receiving money… but it is easy to miss declaring other incomes other than your main salary.

This includes any short-term contract or freelance work, government benefits, bonuses, dividends, or inheritance.  You must also declare any income from AirBnB and Uber.

Don’t be tempted to just ‘leave out’ small amounts either – the ATO’s comprehensive data matching systems mean income can very easily detected, and it’s not worth the hassle if this triggers an audit.

Don’t go DIY

Everyone has that one friend that thinks they can cut their own hair (remember lockdown?!) or put up flatpack furniture on their own.

But when it comes to your taxes, it really is advisable to get some help.

Even if you’re the type that loves number crunching and has their accounts all organised within an inch of their life, it’s likely that if you’re not using an accountant, you’re missing out on extra benefits that a good accountant can provide.

Organise your expense claims

If you want to maximise your tax refund, then you need to claim for everything possible. But make sure you can back up all your expense claims.

At Mayberry Meldrum & Anderson, we will help you categorise all your expense, group things together to streamline claims – and identify expense claims you might not have thought of. 

All you need to do is keep your receipts and records, then upload them to our online tax shop, leaving the rest to us.

Lodge at the right time

Lodging when you’re ready rather than rushing allows you plenty of time to put together your accounts and you are less likely to make mistakes. It also means you’re less likely to undergo scrutiny because you’ve done it all properly, with care.

Having said that, please don’t leave it too late – then you really will be rushing to lodge and might make an error.

As leading chartered accountants and passionate number lovers, we excel at simplifying tax while achieving maximum eligible returns for our clients. All you need to do is supply us the relevant records and receipts, we will handle everything and ensure you receive the returns back without delay.

We can help you – simply contact us today 

At MMA, we specialise in helping individuals and families across Tweed Heads, Northern NSW and beyond to maximise their tax returns. This year, we are excited to introduce our new Online Tax Shop, where you can jump on our website and complete your tax return with minimal downtime and effort.

Do you want to be one of the first to sign-up for our online tax shop? Drop your details below and we’ll contact you as soon as bookings open.