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Canberra Times
3 days ago
- Business
- Canberra Times
Five most common tax mistakes Aussies make that could cost you
Five most common tax mistakes Aussies make that could cost you Picture Shutterstock This is branded content for H&R Block Tax Accountants. Over the coming months, 13 million Australians will lodge their annual tax returns, with 84 per cent expecting a refund. The average size of refunds last year reached more than $3,000. With the potential for such a handy windfall, why would you risk leaving anything behind for the tax man, or having your refund delayed because you made an error or overlooked details when filling in your return? Tax expert Mark Chapman from Australia's largest tax agency, H&R Block Tax Accountants, says there are some common tax return traps people tend to fall into. Here are his five tips for avoiding the pitfalls, getting your tax return right, and that refund in your pocket. 1. Claim what you're entitled to You're entitled to claim a deduction for any expense you incurred in earning your income. "So, if you have incurred a work-related expense, and you have the paperwork to prove it, don't hesitate to claim it," said Mr Chapman. A good tax accountant, like H&R Block, will be able to tell you exactly what you can and can't claim, minimising the chances of an audit at a later date, but consider claiming these: Working from home expenses. You should claim the work-related costs of your home running costs, like gas, electricity, mobile phone, internet and so on. There are two methods for claiming; your tax accountant can help you find the best one. Clothing and uniforms. You can claim the cost of buying and cleaning occupation-specific clothing, such as work uniforms. Car expenses . You can claim the cost of all work-related journeys (excluding home-to-work expenses). Either claim actual costs (which will require a logbook to have been kept, plus copies of receipts/invoices incurred) or claim the ATO's fixed rate of 88 cents per kilometre for each work-related kilometre covered (you need to keep a diary of all your work-relatedjourneys). Handbags. If you've bought a handbag that you use for work-related purposes, such as carrying documents and files, you can score a tax deduction for the work-related proportion of the cost. 2. But don't embellish deductions Exaggerating the facts might be okay when you're telling a fishing story, but not when it comes to tax returns. "You can only claim what you've spent," said Mr Chapman, "so don't inflate deductions in order to get a bigger refund. And only claim for costs you can prove you spent, by producing an invoice, receipt or bank statement, for instance." H&R Block's Mark Chapman. Picture supplied Self-lodgers using the ATO's myTax program are monitored as they prepare their return by the ATO's computer systems to ensure they're not over-claiming. The ATO's computer systems compare your claims to those of others like you. If your claim rings alarm bells, myTax will give you a stern warning inviting you to rethink that deduction. Ignore that message, and you could be headed for an audit. "If your deduction claims are found to be incorrect, you'll be required to repay the tax avoided, plus pay interest," said Mr Chapman. "If the ATO believes you've acted carelessly, a penalty between 25 per cent and 95 per cent of the tax avoided may also be charged." 3. Get some help There's a reason 65 per cent of Australians use a tax agent to prepare their tax return; tax is complicated. Get your tax return wrong and the comeback is on you, either with a lower refund or ATO penalties. "Most people find it far less stressful to simply pass on all their information to a tax agent and leave it to the agent to complete their return, safe in the knowledge that the return will be accurate and complete," said Mr Chapman. "Experienced agents, like those at H&R Block, are good at sniffing out those obscure tax deductions you didn't know you could claim, so they can often pay for themselves several times over. Best of all, the tax agent's fee is also tax-deductible." 4. Don't rely on pre-filled data from the ATO These days, you can pre-fill lots of your income information straight from the ATO's systems with the push of a button. But you still need to take care to check it. "Don't assume income data is correct or complete," said Mr Chapman. "Particularly if you're lodging early, always use your own information as the key source data. "Some people assume that it must be right because the data comes from the ATO. That's a dangerous assumption, especially in July and early August. If you omit income and get questioned by the ATO, the legal burden will be on you, even though you've taken the information straight from the ATO's pre-filled data. 5. Don't forget the basics Many tax returns get held up by the ATO because taxpayers have made basic mistakes like not updating their name or address, or omitting bank details. "If you lodge under different address details or name, the ATO won't be able to match it with your Tax File Number and delays will ensue," Mr Chapman said. "Tell the ATO about the changes before you lodge your return. "The correct bank details are also vital - the ATO doesn't send out refund cheques these days, so no bank details, no refund." Also, take care with spelling. If you've added an extra letter to a key field, such as your name, that slip of the keyboard could consign your return to a black hole whilst the ATO tries to match your details manually. To maximise your tax refund book an appointment, visit
Canberra Times
19-06-2025
- Business
- Canberra Times
Things to do now to maximise your tax return
Things to do now to maximise your tax return Happiness is knowing you'll receive the best tax refund possible. Picture Shutterstock This is branded content for H&R Block. With just a few weeks to go until the end of the financial year, you might think it's too late to knock your taxes for the year into shape. However, even this close to EOFY, there are still some last-minute planning opportunities to maximise your refund for the year. So, what should you be doing as we head towards June 30? We spoke to tax expert, Mark Chapman, from H&R Block Tax Accountants, to get some tips. 1. Running your own business? If so, Mr Chapman suggests keeping in mind the "instant asset write-off" measure. This allows small businesses with a turnover of less than $10 million to claim an immediate tax deduction for all capital purchases costing less than $20,000, rather than depreciating the cost over several years. "This is great for tech items such as computers, tablets and phones, as well as tools and equipment for tradies, office furniture and even some motor vehicles," he said. "Remember, as well as making a purchase, the asset you acquire also must be used or available for use in your business, so make sure the item is delivered and installed by 11:59pm on June 30." 2. Seek expert help One sure way to ensure you get the best return possible is to seek the advice of experienced tax agents like H&R Block, rated Australia's number one tax agent by Canstar Blue. They can identify exactly what you need to do to get into shape for the 2024 tax season and maximise those deductions. H&R Block also offers useful online tools for managing your taxation record-keeping process, including its handy free ReceiptHub app that helps you store receipts, track your kilometres, and log your working-from-home hours. 3. Home office If you're employed but work from home, occasionally or all the time, you're entitled to deductions for costs arising from working at home. H&R Block's Mark Chapman. Picture supplied The expenses that you can claim include: Heating, cooling and lighting Cleaning costs Decline in value (depreciation) of home office furniture and fittings, office equipment and computers (for items over $300) Computer consumables, stationery, telephone and internet costs Items of capital equipment, such as furniture and computers, which cost less than $300, can be written off immediately "With many retailers running EOFY specials, any purchases you make now can be deducted in this year's tax return, so, from a cash flow point of view, you can minimise the time between purchase and tax deduction," said Mr Chapman. "If you're claiming the ATO's 70 cents per hour fixed rate deduction for working from home, you must have a complete record of all your hours worked from home from 1 July 2024, like a diary, timesheets or rosters." Remember, even if you plan to choose this easy option, it's best to ask your accountant to run the numbers in order to work out the best option for you. "You don't want to be leaving money on the table," said Mr Chapman. 4. Car expenses If you use the log-book method, now is the time to check it's current. "Make sure you also have all the receipts, invoices and records of journeys you'll need to calculate and substantiate your claim," said Mr Chapman. "If you use the cents per kilometre method, you'll still need a record of work-related journeys." 5 Mobile phone If you used your personal mobile phone for work, you can claim a deduction for the business-related use. "Make sure you have your phone bills collected and have kept a log of your business/personal use over a four-week period," said Mr Chapman. "That percentage can then be applied to the whole year. But remember, this deduction can't be claimed if you have used the 70 cents per hour method to claim working from home expenses. It already includes a component for mobile phone expenses." Getting organised now can reap some pleasant tax refund rewards sooner. Picture Shutterstock 6. Charitable donations Planning to make any charitable donations? "You can claim a deduction for donations of more than $2 to a registered charity," said Mr Chapman, "provided you have the receipt. 7. Prepay some expenses If you have spare cash, consider paying things like union fees, professional subscriptions and annual insurance premiums in advance to accelerate the deduction. "You can claim a tax deduction this year for expenses which wholly or partly relate to next year," said Mr Chapman. 8. Make a tax-deductible super contribution Any more of that spare cash? Look at making a personal contribution to your super fund. "Provided the total amount of contributions, including the contributions made on your behalf by your employer, does not exceed $30,000, this can be a great way to boost your retirement savings and claim a tax deduction for the personal contribution," said Mr Chapman. "The payment must be made by June 30, and you need to advise your super fund that you've made the payment by the time you lodge your tax return." Your super fund or accountant can guide you on completing the form. 9. Offset capital gains against capital losses If you've disposed of shares or any other form of investment and you've made a capital gain, take a look at your investment portfolio and consider disposing of any assets you own that might be sitting at a loss. The resulting capital losses can be offset against the capital gain. "But be careful about selling shares sitting at a loss and then buying them back in the new tax year," said Mr Chapman. "The ATO takes a hard line against so-called 'wash sales'." "This refers to the sale of an asset before the year end and the purchase of a substantially identical asset immediately after the year end. The ATO regards the purchase and the sale as effectively the same asset and has issued a tax ruling which states it can apply the anti-avoidance provisions to cancel any tax benefits and apply penalties." Established in 1971, H&R Block Australia is the leading tax preparation firm in Australia, handling more than 700,000 returns annually. Based in Sydney, the company serves the taxpaying public with more than 400 offices around the country, as well as offering online options and phone appointments. To find out more visit or call 13 23 25.
