5 biggest tax return mistakes to avoid ahead of $3,000 boost

As tax time approaches within the next few weeks, it’s crucial to start preparing your annual tax return. Beginning July 1st, approximately 13 million Australians will be eligible to lodge their returns.

With 84% of these individuals anticipating refunds, averaging over $3,000, it’s worth dedicating time and attention to ensure accuracy and avoid common pitfalls.

Here are some essential tips to streamline your tax return this year:

1. Claim what’s rightfully yours:
   • You’re entitled to deductions for expenses incurred in earning your income. This includes work-related clothing, protective equipment, self-education expenses, professional subscriptions, travel and meal costs, and tools and equipment.
   • If you work from home, you can claim a portion of home running costs, either based on actual expenses or a standard rate of 67 cents per hour. However, avoid double-dipping by separately claiming items like mobile phone costs.
   • Be sure to document and retain receipts for all claimed expenses.
2. Avoid exaggerating deductions:
   • Only claim expenses you can substantiate with evidence. Overstating deductions can trigger audits and result in penalties and interest charges.
   • The ATO monitors self-lodged returns to prevent over-claiming, so exercise caution when declaring deductions.
3. Don’t rely solely on pre-filled data:
   • While pre-filled information from the ATO can be convenient, verify its accuracy and completeness, especially if lodging early.
   • Ensure all income and deduction details are correct before submission.
4. Pay attention to basic details:
   • Inform the ATO of any name or address changes to avoid processing delays.
   • Provide accurate bank account details to facilitate refund transfers.
   • Double-check for spelling errors in key fields to prevent processing complications.
5. Seek professional assistance:
   • Taxation can be complex, and seeking help from a tax agent can ensure accuracy and compliance.
   • Tax agents are skilled at identifying eligible deductions and can potentially maximize your refund.
   • Remember, the fee for engaging a tax agent is tax-deductible.

By adhering to these tips and seeking expert guidance if needed, you can navigate the tax return process smoothly and optimize your financial outcomes.