If you’ve made the exciting move from Australia to foreign shores, you’re probably enjoying learning all about your new home and having interesting cultural experiences. But as well as all the fun, there are many practicalities you need to consider, including filing your Australian tax return. When it comes to doing your taxes back home, avoid these five common mistakes expats make with their Australian tax returns:
1. Not correctly identifying themselves as a resident or non-resident
This is potentially the biggest and most costly mistake you can make. Generally, you will be classed as an Australian resident if you’re overseas temporarily. If you are a non-resident – so you plan to live and work abroad permanently – you may not need to file a tax return, unless you have Australian income.
2. Using estimates rather than actual figures
Use accurate figures when filling out your tax return, not estimates. The ATO will check the figures you’ve entered against sources, and even an estimate that is off by a few hundred dollars could catch their attention.
3. Not declaring overseas income
Even though you may not be taxed on it, you still need to declare any foreign income if you’re an Australian resident for tax purposes – even if tax was deducted in the country you earned it.
4. Not including income from property rentals
You should claim income that you’ve earned from any property you rent out each year. If you only rent it out for part of the year, make sure you adjust your deduction claims based on how long the property was rented out for.
5. Not backing up claims with evidence
If you don’t have receipts for your expenses, you can only claim up to $300 worth of work-related expenses. For everything you put on your tax return, ensure you have the evidence to back it up. Use a folder with labelled sections to keep yourself organised and save yourself last minute stress.
If you’d like the peace of mind that comes with having your Australian tax return completed by an expert, contact Expat Tax today. As expats ourselves, we understand the complexities of your situation and can ensure you stay on the right side of the tax man.