Common Tax Mistakes To Avoid

Essential Tips for Accurate Filing

Tax time can be stressful, but avoiding these common mistakes can save you time, money, and hassle. Here are some pitfalls to watch out for:

  1. Incorrect or Missing Information: Always double-check your personal details, such as your Tax File Number (TFN), income, and deductions. Even small errors can cause delays.
  2. Overclaiming Deductions: Claiming more than you’re entitled to is a common mistake. Ensure you have receipts and proof for every deduction. For example, only claim a portion of your home office expenses that relate directly to work.
  3. Forgetting Income: Remember to declare all sources of income, including interest, dividends, and any side hustles. The ATO has sophisticated data-matching systems to cross-check your income.
  4. Not Keeping Proper Records: Keep all relevant receipts and records for at least five years. This includes work-related expenses, charity donations, and any investment property costs.
  5. Missing Out on Deductions: Don’t miss out on claiming deductions you’re entitled to. Common missed deductions include work-related car expenses, home office costs, and self-education expenses.
  6. Lodging Late: Filing your tax return late can result in penalties. Make sure to lodge your return on time to avoid unnecessary fines.
  7. Not Seeking Professional Help: If your tax situation is complex, it’s worth consulting a tax agent. They can help you maximize your deductions and ensure your return is accurate.

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Example: Home Office Deduction

If you work from home, you may be eligible to claim a portion of your household expenses. Here’s how to calculate it:

Note: The business percentage should reflect the proportion of your home used for work purposes.

Tips for Better Record-Keeping

  • Use Apps: Use apps like Expensify or QuickBooks to keep track of your receipts and expenses digitally.
  • Regular Updates: Set aside time weekly or monthly to update your records.
  • Separate Accounts: Consider having a separate bank account for business expenses to simplify tracking.

Need help with your taxes? Contact Tax Accounting Adelaide for expert advice and assistance. We’re here to help you avoid these common mistakes and get the most out of your tax return.