When it comes to handling your tax return like a boss – there are those among us for whom the numbers will just never add up.
Maths isn’t for everyone… but if you can’t afford an accountant, happen to be an Australian living abroad, and are duty-bound to do it yourself – then we have some tips on getting it right!
Welcome to our top 5 tax traps you need to avoid as an Aussie working overseas. Read it here first and don’t get caught out!
The Top 5 Tax Traps Overseas Aussies Should Avoid
Let’s delve straight in – to the world of tax traps!
1 – Forgoing the Checklist
There are many reasons why you need tax return checklists, but the most important thing they do is stop you from forgetting the why, what, and when of filing your tax return.
They tell you what you need to do, by when, and for what purpose, so you don’t fall into the tax trap of having to pay penalties for late filling.
2 – Not Making up the Difference
If you are working in a country and not a resident in Australia, the Australian Tax Office might well ask you to make up the shortfall.
For example, if your tax band in your new country means you pay less tax there, the ATO might well ask you to make up the difference between that fee, and the fee you would have been charged if you were in Australia.
Effectively, you might need to owe the difference and not even know about it until you move back home. Don’t run the risk of owing tax!
3 – Not Checking the New Country’s rules
What if you move to a new country to live and work, but you still pay tax to the Australian government and think you are safe? Not so! You might well owe taxes in the country you reside in now, as well as taxes to the ATO.
Ignorance of tax law doesn’t exempt you from paying it, unfortunately. You may soon find yourself with an excess bill! Check with the ATO if you are in doubt.
4 – Not Contributing to Superannuation Funds
If you ever end up working abroad for years at a time or living there, then try to return to Australia, your Superannuation Fund will be low to empty.
This will need to be topped back up again. Luckily, you can continue to pay it while you are abroad – as long as you remember to do so and don’t fall into this particular Expat tax trap.
5 – Not Seeking Advice
If you don’t know what you should and should not be paying, and you can’t work it out, then it is better to spend the extra $100 getting help than waiting a few years for the fine to come through.
Nobody wants to be penalized by the ATO – and nobody wants the bad name associated with dodging taxes. Don’t fall into this trap, either.
If you have read through this article and feel a little more confident then we have done our job. If in doubt, remember to seek professional help.
If nothing else, they will be able to help you keep tax costs to a minimum. You never know – you might even make your money back again.