The ATO has profiled the five most common tax return errors and, interestingly the personalities most likely to make them this tax time!
Common tax return errors
Assistant Commissioner Kath Anderson said it’s often simple mistakes and misunderstandings that trip people up. “While we know most people want to get it right, our audits and reviews show that there are five main areas where taxpayers are most likely to get it wrong.”
The ATO list of top five common tax return errors include :
leaving out income – maybe forgetting a temp job or money earned from the sharing economy
claiming deductions for personal expenses – home to work travel, normal clothes or personal phonecalls
forgetting to keep receipts or records of their expenses
claiming for something they never paid for – often because they think everyone is entitled to a ‘standard deduction’
claiming personal expenses for rental properties – either claiming deductions for times when they are using their property themselves or are claiming interest on loans used to buy personal assets like a car or boat.
Knowing what you can legitimately claim helps to avoid common tax return errors and there are three golden rules for work-related expenses. You must have spent the money yourself and not have been reimbursed, it must be directly related to earning your income, and you must have a record to prove it.
A list of common tax deductions is here.
Work-related expenses must have a direct connection to earning your income. However, if you have an expense that has both a private and work-related component, you can claim the work-related portion. For example, if you use your personal mobile phone for work-related calls, you need to figure out the percentage that relates to your work use, and only claim a deduction for that portion.
