Latest news with #deductions
News.com.au
19 hours ago
- Business
- News.com.au
20 tax mistakes Aussies make each year
From dodgy deductions to missed refunds, these are the biggest blunders Aussies make at tax time, and how to dodge an ATO disaster. less than 2 min read If you're not using a registered tax agent, your deadline is October 31. After that, late lodgers can be hit with $275+ fines, compounding every 28 days. Using a tax agent can extend your lodgement deadline — but only if you've registered with them by October 31. Photo: Supplied The fix: Lodge early, or link with a registered tax agent through myGov before the cut-off. Photo: Supplied If you have investments, crypto, rental income, multiple jobs or business expenses, it's easy to make a mistake. But many Aussies still self-lodge without knowing the risks. A tax agent can help maximise your deductions and reduce audit risk, and their fee is deductible next year. Photo: Supplied The fix: If your return goes beyond basic wages, consider getting help. It might save you thousands in the long run. Photo: Supplied
ABC News
a day ago
- Business
- ABC News
Millionaires who pay no tax and richest and poorest postcodes revealed in ATO tax stats
There were 91 Australians who earned more than $1 million in total income yet paid no tax in 2022-23, according to newly released data from the Australian Taxation Office (ATO). The figures also show Australia's highest earners live in Sydney's eastern suburbs, taking in Darling Point, Edgecliff, Rushcutters and Point Piper. Analysis of the data by the Australia Institute and the ABC shows overall, these 91 millionaires claimed $390 million worth of different deductions to reduce their tax bills to zero. The vast bulk of this was the 19 of them who made $291 million in donations to tax-deductible charities, or an average of about $15.4 million each. Using a tax agent to manage tax affairs is also an allowable tax deduction for all taxpayers, meaning some of those who earned more than $1 million but paid no tax claimed these expenses. This group of non-tax-paying high-earners claimed $62.8 million in deductions for managing their tax affairs — an average of $690,815. The Australia Institute's chief economist, Greg Jericho, says this shows the nation's wealthiest and richest can use the tax system to reduce tax bills to zero "at a time when we are debating changes to superannuation taxation for the small number of people with balances over $3 million". He says this happens because the wealthy can pay "high-priced tax lawyers and accountants" to do it. The data also shows 2.3 million Australians declared rental income in 2022-23, with about 71 per cent of landlords owning only one investment property (just over 1.6 million). About 19 per cent (423,000) own two properties, around 6 per cent (130,000) own three properties, while around 4 per cent of landlords (47,000) own four properties. There are very few landlords (18,837) with five investment properties and a similarly small group with six or more (19,389). Overall net rental income for 2022–23 was $1.6 billion, down from $6.0 billion in 2021–22. More landlords made profits than losses in 2022–23. The average total net rent median was $52 and the average was $696. Of about 1,130,000 landlords who made a loss (were negatively geared), the median loss was $5,487 and the average was $9,346. The ATO figures show the country's highest-earning postcodes were in Sydney, with seven suburbs making up the top 10. The postcode with the highest average taxable income ($279,712) was in Sydney's eastern suburbs — postcode 2027 — which takes in Darling Point, Edgecliff, Rushcutters and Point Piper. That was followed by Double Bay (postcode 2028) and Woollahra (2025). Melbourne's Toorak and Hawksburn — postcode 3142 — came in fourth place, then we jump back to Sydney's eastern suburbs, with Vaucluse, Watsons Bay, Dover Heights, Rose Bay North and HMAS Watson (2030) coming in fifth place. But those living in NSW were also among the nation's lowest average income earners. The lowest-income postcodes were in areas with higher numbers of university students. The area taking in students studying at The University of Newcastle's main campus at Callaghan, postcode 2308, earned an average taxable income of $20,878. The next poorest postcode was 2052, taking in the University of NSW area, with an average taxable income of $20,892. Since reporting started in 2010–11, surgeons have remained the highest-paid occupation, with 4,247 individuals reporting an average taxable income of $472,475 in 2022–23. This was followed by anaesthetists: 3,658 individuals in this category earned an average taxable income of $447,193. The third-highest-paid occupation was "financial dealers", of which there were 5,147 with taxable incomes of $355,233. The poorest paid jobs were in the "personal careers and assistants" category, earning an average taxable income of $22,533. This was followed by "fast food cooks" earning $22,722 and "apprentices and trainees in hospitality" earning $25,358. More than 16 million Australians lodged tax returns in 2022–23. The ATO's data showed 10.3 million individuals claimed a total of $28.3 billion in work-related expenses — an average of $2,739 per person. The average superannuation account balance increased from $164,000 in 2021–22 to $173,000 in 2022–23. Net tax from companies for the 2022–23 income year increased by 9.2 per cent to $140 billion (compared to $128 billion in 2021–22). The biggest company tax liability came from the mining industry (39 per cent of company net tax) with the industry's net tax growing from $42.3 billion to $54.4 billion. The luxury car tax increased by 17.9 per cent to $1,153 million.
Daily Mail
5 days ago
- Business
- Daily Mail
How you could get $20,000 back in your tax
New data reveals nearly 30 per cent of Australians lose receipts and with tech, stationery and furniture all claimable come tax time this could cost them an estimated $20,000 over ten years. The research from Officeworks revealed that while many Australians were eager to claim everything they could, the results showed tax time confusion remained. Nearly half (47 per cent) mistakenly thought they could use the shortcut method and still claim individual working-from-home expenses. More than 40 per cent wrongly believed they could claim up to $300 on their return without having made any actual purchases, while more than a third incorrectly assumed travel between home and work was tax-deductible. Financial adviser and Pivot Wealth founder, Ben Nash, said these misconceptions could prove costly in the long run. 'One of the biggest mistakes people make is assuming they can claim things just because it's the end of financial year,' he said. 'You need to have actually incurred an additional expense, and it must relate directly to earning your income.' Nash added that confusion and poor record-keeping saw many taxpayers miss out on valid claims. 'Nearly one in three (32 per cent) admit to missing deductions they were entitled to in previous years and general confusion or poor record keeping is leading people to forgo potential claims,' he said. 'That's real money left on the table.' He advised people to take advantage of digital tools that made the process easier and if unsure to speak to a tax professional. Last month the ATO revealed some of the wild work-related expense tax claims people have tried to put past the agency which included a truck driver who tried to claim swimwear because it was hot where they stopped in transit and they wanted to go for a swim. Increasingly taxpayers are turning to AI tools like ChatGPT to navigate their confusion over what deductions they can and can't claim according to software firm Xero. Managing director Angad Soin said seven per cent had used AI while five per cent used social media influencers. He said more than half (51 per cent) admitted they were confused about deduction rules, particularly those relating to car, transport and travel expenses or working-from-home costs. Almost one in five had previously tried to claim a deduction they weren't sure was actually eligible for. 'Half of those who made a specific tax deduction purchase last year found it didn't go positively, for reasons including they didn't get the return they expected (17 per cent), discovering their purchase was ineligible to claim (21 per cent), or they had to amend their return due to incorrect deduction claims (7 per cent),' he said. ATO Assistant Commissioner Rob Thomson said exaggerated deduction attempts would not be tolerated. 'While a lunchtime dip might clear your head for work, swimwear for a truck driver is clearly not deductible,' he said. 'If your deductions don't pass the pub test, it's highly unlikely your claim would meet the ATO's strict you should be prepared to back it up, with records like a receipt or invoice.'
News.com.au
6 days ago
- Business
- News.com.au
How you could get $20,000 back in your tax
For most Aussies, tax time means either a nice tax refund that can boost your savings, or the sneaking suspicion you've left money on the table. According to new research from Officeworks, lots of Aussies are getting tax time wrong – and it's costing us serious money. From lost receipts to missed deductions, and even more in between, the result is the average taxpayer is donating hundreds or even thousands of dollars extra to the ATO just because they don't know better. Below I've included some of the most common tax mistakes and how much they could be costing you. And spoiler alert, if you're falling into these traps it could cost you more than $18,000 over the next decade. So whether you're a regular employee, working for yourself, or running a side hustle, here are the top tax mistakes to avoid – and how you can keep more of your hard earned money. Not claiming what you're entitled to One of the biggest mistakes made by Aussies at tax time is a simple one – not claiming all the deductions you're entitled to. According to H&R Block, people who lodge their own tax return miss out on deductions that cost them an average of $525.50 each year. And it's not even just the big things people miss. Officeworks research found that just 24 per cent of people claim deductions for office furniture, 20 per cent claim pens, and 46 per cent are deducting electronics and tech accessories. Given how many people are working from home, and buying things they use for their work, this shows there are a heap of people missing out on deductions. If you're spending money on deductible items for your work, you're entitled to claim them – but only if you're tracking them – and then actually include these expenses in your claim. Nearly 30 per cent of Aussies lose receipts and end up claiming less, according to Officeworks EOFY research. That could easily mean $500 in missed deductions (or even more), meaning $185 less in your tax refund based on a 37 per cent marginal tax rate. This mistake is an easy one to avoid, it just requires a little bit of organisation. The ATO accepts digital receipts, so you can make your life easier by filing digital receipts on your computer, using an app, or choosing a supplier like Officeworks that offers digital receipts or their own app for tracking. That way at the end of the year, you'll have everything organised and in one place, making your claim easier – and most importantly making sure nothing is missed. Not planning at EOFY Bad timing can be just as costly as bad habits when it comes to your tax return prep. The research from Officeworks shows that 44 per cent of Australians make work related purchases before 30 June to boost their tax deductions. When your deductible expenses land before 30 June rather than after 1 July, this means you'll get the deduction, and the refund a full year sooner. But if you miss the window, you could miss out on the deduction. If you have another $500 in expenses deferred or forgotten, that's potentially another $185 missed this year. Not getting the right help with your return Lots of Aussies still lodge their own tax returns, and for some people that's completely fine. But the data shows a clear benefit to getting some good help with your tax prep. People that lodge their tax returns through a tax agent receive an average tax refund of $3550, compared to $2576 for self-lodgers. This reflects a difference of $974 every year, or almost a thousand dollars you could potentially be missing out on by doing your own tax return (even after fees). And to make getting some help here even easier, the cost of a tax agent is fully tax deductible. Total cost of these mistakes These tax mistakes may seem small, but they add up. Across the four areas outlined here, you're looking at a total of $1870 less back in your refund this year. Over the course of a decade, that's a total of $18,695 – or almost $20,000 being left on the table. The wrap The tax system is full of opportunities to get more out of the money you already have, and keep more of your hard earned income – but only if you understand the rules and how to use them to your advantage. Most people aren't trying to dodge tax on purpose. It could be that you're too busy, unsure, or maybe even a little overwhelmed. But by avoiding a few common mistakes, and being just a little bit more intentional, you could be saving tens of thousands of dollars, maybe even more over the years ahead. To get the most out of your tax refund this year, and use the money as a platform to start the new financial year in a stronger position, there are a few things you need to look out for. Keeping your receipts, tracking everything (even the small stuff), being strategic with your timing, and getting good help – it all makes a big difference. If you want some help with your money and investing, you can book a call with Pivot Wealth here.
Daily Mail
21-06-2025
- Business
- Daily Mail
I'm a tax accountant and these are the four biggest mistakes you're making on your returns - and it's costing you money
Australians are forgetting to claim work-related expenses and often select the wrong work from home deduction in their tax returns. That's according to a leading taxation accountant who has singled out the top five errors taxpayers make as tax time approaches on July 1. Belinda Raso from Tax Invest Accounting said taxpayers are missing out on hundreds of dollars by making little mistakes. 'They just rush in and lodge way too early and usually don't claim what they are entitled to,' Ms Raso said. WFH deductions One of the most common tax mistakes involves deductions made for working from home. Ms Raso said people who WFH do not always apply for the maximum deductions they can receive. Work from home expenses can be worked out via two different methods: the fixed rate 'shortcut' method of 70 per cents per hour, or the actual cost method, where they calculate their total expenses. 'It is very important that you work out both methods to ensure that you're getting the largest possible deduction,' she said. 'Another thing that people forget to do is, if they are going by that fixed rate method of 70 cents per hour... they're forgetting to claim everything else, and this includes computer equipment, it includes furniture, it includes software, the list is endless.' Medicare levy surcharge The next mistake Australians often make is incorrectly recording their liability for a Medicare levy surcharge - the additional charge on taxpayers who do not have private health insurance. Ms Raso said that the tax office will change the return if they have proof workers are liable for the levy. Australians forget to work out the most savings-efficient method for determining their claimable work-from-home expenses, Ms Raso warned 'It is up to you to understand when you are and when you're not liable for this,' Ms Raso said. Work related allowances The experienced accountant said some Australians make a huge mistake by failing to claim work-related expenses, such as claiming goods that they use for both personal and work use. 'As an example, one of the most common ones is a computer or laptop,' Ms Raso said. 'You sit there and think, "well, I use this for both personal reasons and for work, I can't claim it then". That's not true. 'Any expense that you're claiming, you can apportion a personal element to it and just claim whatever percentage is for work. It doesn't mean that you can't claim it.' Logbook Her final tip was for Australians who use a personal vehicle for work purposes. She said workers should ensure they are recording their usage accurately in a logbook. 'If you are travelling over 5,000 kilometres for work, for actual work-related travel, you should be keeping a logbook,' Ms Raso said. 'But this is more than just tracking your kilometres in a logbook.' Workers should also keep records of their fuel and oil costs, or odometer readings. They will also need evidence of other car expenses.
