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June 18th, 2014
As a medical doctor in Melbourne, it’s normal to find yourself stressed with trying to balance the performance of your profession and the management of your business─ especially since your practice is both. In this crisis, you should look into hiring reputable medical accountants from Melbourne firms like MEDIQ Financial; otherwise you might find yourself making mistakes that will warrant you a tax audit. In any case, you should be sure not to commit any of the following mistakes:
Writing off personal expenses as business
To avoid getting tangled into this mess, it’s best to list which is which before you file your returns. Your travel expenses, for instance, could be either depending on the nature of how you incurred them. So to keep yourself and the ATO from getting confused (and the latter from knocking on your doorstep to find out for sure), identify and classify each expenditure.
Sure, numbers can be tricky, but tax laws do not allow this for an excuse— even the absence or presence of a few zeroes can earn you an audit, so be as accurate as you can be. This is because many businesses practice deduction inflation, where they claim much higher than what they actually spent.
Creating bogus businesses
Another advantage of keeping your returns accurate and true is the fact that the ATO is on the lookout for people who create businesses just to get a deduction. Here’s what writer Agnes King has to say in an article to Smart Investor:
“Goods and services tax scams are another simple dodge. People set up bogus businesses, register for GST, put in a few business activity statements, collect the GST credits on false purchases, then shut up shop and disappear.
More often than anyone cares to admit. There is a surprisingly large amount of bogus tax file numbers in circulation.”
One of the best ways to make sure that you don’t fall into any of these possible grounds for an audit─ or worse, a fraud lawsuit─ is to hire reliable medical accountants. This way, you can focus on the most important part of your practice: saving lives and helping the sick, without being burdened by the tough financial aspects of running a business.
(Source: Tax rorts that get you an audit, Smart Investor, September 11, 2012)