Big tax return mistakes you need to avoid this year

With tax season around the corner, cash-strapped Aussies will be eager to file their taxes – but there are some mistakes that could cost you a refund.

Tax season is upon us which means cash strapped Aussies will be eager to file their taxes, but there are some mistakes you need to avoid.

While taxpayers are keen for a fast refund, they may lie on their taxes.

An expert reveals why being dishonest to the Australian Taxation Office (ATO) could cost you a payout.

“Everyone wants money back. The best way is to be honest,” Carly Woods, consumer expert and founder of GetMyRefund told news.com.au.

“Avoid lying because people get found out and once you lie, you actually get listed.

“You get highlighted with the ATO if you lie and it gets found out, and then your subsequent tax returns are always investigated so I would stay away from lying.”

Taxpayers may take desperate measures for a fast payout.

Ms Woods said another common mishap is some people try to get away with claiming some usual deductions.

“People do sometimes try to claim two cars for business at home, when clearly one would be for personal,” she said.

“A business car is for business. It‘s to go to do work, work things with so don’t try to claim two business cars because that will be highlighted.

“And don‘t double up if you’re going to claim something personally and you have a business, don’t then go and claim the same thing on your business because that will get found out. Just be reasonable.”

Ms Woods said some people try to claim personal items such as beds and furniture.

“Some people try to claim everything,” she said.

“For instance, people move houses and try to claim their personal furniture such as sofas and things like that.

“Some people have moved into a house and bought everything new and tried to send the receipts and claim everything, but you can‘t claim everything.

“You can‘t claim your bed as much as we all would like a job that was just sleeping, we can’t claim that back.”

Some people try to claim personal items such as beds.

This year, the ATO is particularly focused on work-related expenses to ensure taxpayers understand the changes to the working from home methods and are able to back up their claims.

“We continue to see shifts in the way Aussies are working, and it’s important to consider whether your claims reflect your working arrangements this year,” ATO assistant commissioner Tim Loh said.

“There have also been some changes in how you calculate things like working from home deductions, so don’t be tempted to just copy and paste your prior year’s claims. We know a lot of people are working back in the office more compared to last year.”

Ms Woods said you can claim work expenses such as second screens, laptops and office furniture.

She also stressed about the importance of keeping receipts for your claims.

“Proof is always better to always keep as much receipts because there’s only a certain amount that you can actually claim if you don’t keep your receipts,” she said.

“For instance, if you want to claim your car as a business, you can keep a logbook for three months.

“What you did use for business and your receipts for your fuel and everything you can claim back the percentage of what you’re using it for as an entire lot.

“If you don’t keep the receipts, there’s only a certain amount they can claim back. It’s up to 5000 kilometres can be claimed on the car.

“It’s really good that you keep your receipts so you can be honest.”

The ATO is particularly focused on work-related expenses.

WHAT SHOULD I INCLUDE WHEN LODGING MY TAXES?

According to the ATO, you need to declare all income in your tax return, such as employment, government, and investment income.

Lodgers may also be entitled to claim a deduction for work-related or investment-related expenses.

The ATO recommends you have all the following information available to lodge your tax return:

• Bank account details

• Income statement or payment summaries from all of your employers

• Payment summaries from Centrelink (Services Australia)

• Income from investments, like rental properties or shares

• Receipts or statements for the expenses you are claiming as deductions

• Your spouse’s income (if you have one)

• Private health insurance information (if you have cover)

Most online returns are processed within two weeks. Paper returns may take up to 10 weeks to process but can take up to seven weeks for paper returns to show in the ATO’s systems.

WHEN IS THE DEADLINE TO LODGE MY TAXES?

There are two deadlines depending on whether you use a tax agent or lodge your own taxes.

For people lodging their own tax return, you have until October 31.

Those using a registered tax agent have an extended deadline by May 15 next year. However, they must engage their accountant before October 31.