Australians are making the same costly mistakes at tax time, with accountants warning poor record-keeping, forgotten income streams and incorrect deductions remain among the biggest traps for taxpayers.
As millions prepare to lodge their returns, tax experts say simple errors can lead to delayed refunds, amended assessments and unwanted attention from the Australian Taxation Office – which now has access to more financial data than ever before.
From claiming private expenses as work-related deductions to overlooking side-hustle income and misunderstanding rental property rules, accountants across the country say many taxpayers continue to fall foul of the same misconceptions each year.
Chartered Accountants ANZ Tax Leader Susan Franks
Ms Franks said many Australians underestimated how much information was already available to the ATO.
“The tax office receives information from employers, banks, government agencies and increasingly from digital platforms and gig economy providers,” Ms Franks said.
“If you’ve earned it, it needs to be included, even if it feels informal or ad hoc.”
Drew Pflaum, accountant and founder of SavvyWise
Mr Pflaum said one of the most common and costly mistakes Australians make is failing to maintain adequate private health insurance coverage for their entire family, particularly newborn children and de facto partners.
He said many taxpayers did not realise the Medicare Levy Surcharge (MLS) applies in addition to the standard two per cent Medicare levy for higher-income earners who do not hold eligible private hospital cover.
“The major mistake is not understanding that de facto partners are considered family members for MLS purposes and that newborns should be added to a policy immediately,” he said.
Shane Winter, Director Winter & Co.
Mr Winter said inadequate record-keeping remained one of the biggest issues encountered during tax time.
He said taxpayers often failed to keep sufficient evidence to substantiate claims, including vehicle logbooks and work-from-home diaries, which are essential if deductions are reviewed by the ATO.
Mark Chapman, Director of Tax Communication at H & R Block
Mr Chapman said H & R Block regularly sees taxpayers discover mistakes after lodging their returns, with four in 10 realising they had omitted information.
Common errors include claiming expenses without evidence, attempting to deduct private costs, copying information from previous returns without checking its accuracy, and forgetting to declare additional sources of income.
Nick Farr, Director, Business Advisory, RSM Brisbane
Mr Farr said one of the most common misconceptions involved claiming private expenses as work-related deductions.
He said daily commuting costs were generally not deductible, even where an employee occasionally completed minor work tasks during their journey.
Anthony Kazamias, Partner, Pitcher Partners Brisbane
Mr Kazamias said rental property owners frequently misunderstand the distinction between repairs and capital improvements.
He said renovations and improvements generally could not be claimed immediately, whereas expenses incurred to restore an asset to its original condition may be deductible.
“With the ATO increasing scrutiny of rental property deductions, maintaining accurate records is more important than ever,” he said.
Nitin Saby, Managing Tax Partner, Saby+Partners – Wise Tax Advisers
Mr Saby warned business owners against withdrawing funds from their companies without a compliant loan agreement in place.
He said doing so could result in the amount being treated as an unfranked dividend and taxed at the individual’s marginal tax rate.
Michelle Matchett, Partner, BDO Australia
Ms Matchett said poor record-keeping remained one of the most common tax-time mistakes.
She encouraged taxpayers to wait until their information was marked “tax ready” and to maintain organised records throughout the year rather than attempting to reconstruct expenses at lodgement time.
Hayley Lock, Partner, KPMG Australia
Ms Lock said Australians working remotely overseas should carefully consider whether they have tax obligations in the country where they are working.
She said foreign income may also need to be disclosed in Australian tax returns depending on the circumstances.
Adam Zhang, Senior Accountant, Zimsen Partners
Mr Zhang said property owners frequently make mistakes when claiming repairs, capital improvements, borrowing costs and depreciation.
He said some expenses must be claimed over several years rather than deducted immediately in a single financial year.
Jenny Wong, Tax Lead, CPA Australia
Ms Wong said content creators and social media influencers often overlooked their tax obligations.
She said income earned through advertising revenue, subscriptions, gifts, gratuities and other benefits — including free holidays, clothing and vehicles — may be assessable and should be declared where required.
Dr Adrian Raftery, Mr Taxman
Dr Raftery said many lower-income earners were missing out on valuable superannuation incentives.
He pointed to the government’s super co-contribution scheme and spouse contribution tax offset as examples of benefits that could significantly improve long-term retirement savings while providing tax advantages.
Ilonka Spaeth, National Head of Technical Tax and Business Advisory, Moore Australia
Ms Spaeth said taxpayers were increasingly diversifying into property investment, share portfolios and more complex business structures without fully understanding their reporting obligations.
She said many people underestimated the complexity of their financial arrangements, increasing the risk of mistakes and omissions at tax time.
BDO Tax Partner Mark Molesworth
Mr Molesworth said a common error he sees relates to interest deductions.
He said the deductibility of interest depends on what the borrowed money is used for, not what asset the borrowing is secured against.
“Additionally, if you borrow and use the funds partly for a tax deductible purpose, and partly not, the interest on that facility will have to be apportioned between those two uses for all future years – you can’t ‘choose’ to repay the non-deductible portion of the facility first,” he said.