Mr Taxman
Change the way you feel about taxes.
Get informed and discover what the taxman doesn't want you to know.
Sharing it with Australia, Mr Taxman is a regular Woman’s Day columist and TV finance commentator
  • click to visit Mr Taxman on Twitter
  • click to visit Mr Taxman on FaceBook
  • rss

8 common tax return mistakes

Jul 04, 2011

The new financial year has arrived which comes with it the annual obligation to submit our income tax return by 31 October.  For many of us, the process is as painful as having your teeth pulled but the rewards can be great.  Adrian Raftery, author of 101 Ways to Save Money on Your Tax – Legally! shares with us eight common traps to avoid when doing your tax this year.

1.      Omitted income – this year the ATO data-match over half a billion transactions and expect to contact 400,000 taxpayers with discrepancies on their interest, dividend, trust and managed fund income.  This process is quite lucrative as almost $330 million in tax revenue was generated last year due to audit investigation by the ATO.  Overseas income and capital gains are particular areas of focus this year. You can run from the taxman but you can’t hide. 

2.      Car log books – if you make a claim for motor vehicles expenses under the log book method then it is obvious that make sure that you actually have a log book prepared in the correct format.  It must be for a continuous 12 week period and prepared within the last five years.  If you have changed your car or your job duties since you did your log book then you must prepare a new one. 

3.      Rental properties – the ATO always sees a number of errors with rental property tax returns including initial repairs, interest on loans which include a private component, borrowing costs and claiming depreciation without a quantity surveyor’s report.  I have also seen a number of returns where the taxpayer simply didn’t realise everything that they could claim, particularly land tax and strata levies.  If you have an agent, then ask them for a summary of income and expenses to make the return process easier.    

4.      Not lodging – there are a number of slackos out there that simply procrastinate and not only don’t lodge a tax return on time, but have several returns outstanding.  Get them in as you could be costing yourself thousands in unclaimed refunds.  My record was submitting 33 years’ worth of tax returns which netted the lucky person over $70 thousand in refunds!!  If you know that you have to pay then lodge your return to avoid unnecessary late lodgment penalties.  The ATO is always willing to negotiate payment plans.

5.      Medicare levy surcharge – if you have private health cover or a low income earning spouse, then make sure you put in those details to avoid inadvertently getting slugged with the extra 1% Medicare levy surcharge.

6.      Mathematical errors – small errors could result in big mistakes.  A wrong number here or a bad calculation there may cost you thousands.  So if you do your return yourself then make sure you “measure twice” and avoid any unnecessary headaches.  Make sure that you go through all your receipts and graze through every line of all bank account and credit card statements because there are a myriad of deductions that you might be missing out on.  If you have more than $300 worth of total deductions then you must have documentary evidence for the full amount – not just the amounts over $300.

7.      Education tax refund – According to government estimates, there are approximately 400 000 (or one in five) parents who are eligible for the Education Tax Refund but have not claimed for it. If you receive Family Tax Benefit Part A, have you been missing out on getting 50% back on certain education expenses for your schoolchildren?

8.    Doing it yourself – just as most people can change a tyre, most of us have the ability to do our tax ourselves but it usually pays to get an expert to look at your tax for you.  The last thing you need is a knock on the door from the taxman because you claimed too much.  A registered tax agent knows where the boundaries are in terms of what you can and more importantly can’t claim.  And their fee is tax deductible too!

Tags: ChildrenDeductionsEducationEmployeesFamilyPersonal taxPropertySharesTravel

Author: Mr Taxman

Comments

"Good post, Mr Taxman. Particularly point 8 about the value of a registered tax agent, which is definitely a good option for those who have more complex affairs. Remember, use a *registered* tax agent, as they are qualified to assist. You can find a registered tax agent by visiting the Tax Practitioners Board website http://www.tpb.gov.au/ Tamera Lang Tax Counsel, The Tax Institute"

By: Tamera Lang on Jul 04, 2011 8:14AM

"thanks Tamara. Yes make sure that you use a registered tax agent. Tip 92 in my book talks about how to go about getting a great accountant."

By: Mr Taxman on Jul 05, 2011 10:04PM

"Howdy , I am studying and paying for my own courses the one was $1600 and the other $2600. Get no help from anybody being a New Zealand Citizen. Can I claim this on my tax return? many thanks"

By: Louisa on Jun 16, 2014 1:48PM

Post a New Comment

Media Availability

Are you interested in booking Mr Taxman for a speaking engagement or requesting his viewpoints for an article?

comments-rhsLatest Comments

  • "Do you think that to dramatically improve your success rate you have to read tons of thick books, buy expensive software and spend countless hours of learning more about Forex? What I'm going to..."

    By: priyanka at Jun 18, 2018 5:37AM

    Post: Foreign currency trading

  • "Thanks to everyone out there who has given my company a good credibility record in terms of financing. our aim is to help people with money at a low interest of 3%. I want to use this medium to..."

    By: Raymond Hills at Jun 17, 2018 11:32PM

    Post: 101 Ways to Save Money on Your Tax Legally

  • " BE SMART AND BECOME RICH IN LESS THAN 3 DAYS....It all depends on how fast you can be to get the new PROGRAMMED blank ATM card that is capable of hacking into any ATM machine, anywhere in the..."

    By: Johnny Trent at Jun 17, 2018 5:16PM

    Post: The secret to getting your loan approved

  • "my name Mrs. Helan, i am from Canada i have been searching for a genuine loan company for the past 4 years and all i got was bunch of scams who made me to trust them and at the end of the day, the..."

    By: Helen at Jun 16, 2018 2:07PM

    Post: The secret to getting your loan approved

  • "Has Mr Taxman closed down? I see there are no responses for over 12 months. Perhaps the site should be shut down if that is the case."

    By: Susan at Jun 16, 2018 1:57AM

    Post: Two important dates for those with HECS/HELP debts