As tax time draws near, people are thinking about their tax returns. But be warned, scammers are taking advantage of your tax anxieties and trying to grab your hard-earned cash.

“If someone calls you and says they are the ATO audit department and you have an outstanding debt, be very wary. They will be very aggressive, threatening to send the police around if you don’t pay up,” Mark Chapman, communications director with tax specialists H&R Block, told The New Daily.

“They want instant payment so don’t give over your credit card details, your tax file number and never make any payments. The ATO does not operate like that. It’s best to just hang up straight away.”

The other scam going around is an email purporting to be from the ATO and asking you to click on a link.

“If you click on the link you will download a virus and ransomware that will allow them to take over your computer. They then demand payments to get your data back,” Mr Chapman said.

“The ATO never asks you to click on a link or download a document. If you get something like that just delete it.”

Tax returns

Avoiding the scammers is one important thing. But there are other issues you need to think about as you prepare to lodge your return.

Mr Chapman says it’s time to think about deductions; the costs you can claim against you tax for work-related expenses.

There are two things to note about deductions: they have to be fair dinkum work-related expenses and you must be able to prove them.

“Make sure you’ve got substantiation for all your deductions, They have to be genuinely related to earning income, you have to be able to show that the money was spent and you have to have records like invoices to back that up.”

Areas to watch

People often slip up with car-related claims. “People often claim trips from home to work in the car as a work-related expense when they’re in fact a private expense,” Mr Chapman said. “But you can claim trips you make in your car during your working day if they are work-related trips.”

“Self-education is another problem area. You can claim education costs that have a close connection to your job; things that improve your skills in that area. But you can’t claim costs for courses that will give you a career change or a promotion.”

The tax man cometh

Tax commissioner Chris Jordan has warned punters the ATO will be cracking down on dodgy claims. But there are some easy ways to keep yourself out of his sights.

“If you don’t declare income from things like capital gains, bank interest or anything you make from overseas sources you are at risk. The ATO gets information from third parties and if you don’t declare income you could trigger an audit,” Mr Chapman said.

The ATO also will electronically compare your return to the average of those with similar circumstances.

“If you make claims for deductions way above normal could could also trigger an audit.”

An audit, in the first instance, could be simply a letter asking for details which should then result in you coming clean if you’ve over-egged your claims or neglected to declare income.

But if the ATO gets serious it could result in a full-blown audit of your affairs.

“That can be stressful, long lasting and expensive as you would have to pay back that tax with interest and penalties,” Mr Chapman said.