Tax time is just around the corner, and for many Australians, it’s a season of confusion, crossed fingers, and the hope that the Australian Taxation Office (ATO) won’t come knocking.
But what if you could turn the tables and ensure you’re not leaving money on the table?
According to Belinda Raso, a seasoned tax accountant at Tax Invest Accounting, Australians make four major mistakes year after year—and they could be costing you hundreds, if not thousands, of dollars.
Let’s break down these common pitfalls, add some extra context, and arm you with the knowledge to make this tax season your most rewarding.
1. Rushing your return—and missing out
It’s tempting to get your tax return in as soon as the clock strikes 1 July. After all, who doesn’t want a refund as quickly as possible? But Raso warns that rushing can mean you miss out on deductions you’re entitled to.
Many people lodge too early, before the ATO has pre-filled all their income statements, bank interest, and private health insurance details. This can lead to errors, delays, or even audits.
Here’s a pro tip: Wait until late July or early August, when most information is automatically uploaded to your myGov account. This reduces the risk of mistakes and ensures you claim everything you should.
2. Work from home (WFH) deductions—not maximising your claim
With so many of us working from home, the ATO has provided two main ways to claim your WFH expenses: the fixed rate method (currently 67 cents per hour for 2023-2024, previously 80 cents during COVID, and 52 cents before that) and the actual cost method.
The fixed rate is simple but might not give you the best bang for your buck. Raso’s advice? Don’t just default to the shortcut.
‘Work out both methods to ensure you’re getting the largest possible deduction,’ she said.
And don’t forget: if you use the fixed rate, you can still claim separate deductions for items like computers, office furniture, and software—as long as you have receipts and can show they’re used for work.
The ATO is cracking down on WFH claims, so keep detailed records—a diary of your hours, receipts for purchases, and evidence of your home office setup. A registered tax agent can help you navigate the rules if you are unsure.
3. Medicare levy surcharge—know when you’re liable
The Medicare levy surcharge is an extra tax for Australians who earn above a certain threshold and don’t have private hospital cover.
Many people get tripped here by not realising they’re liable or incorrectly claiming an exemption.
Belinda points out that the ATO will adjust your return if they have evidence you should pay the surcharge, but it’s up to you to know your situation.
If your income (including reportable fringe benefits) is above $93,000 for singles or $186,000 for families, and you don’t have the right private hospital cover, you’ll be hit with the surcharge.
Even if you only go over the threshold for part of the year, you may still be liable for a portion of the surcharge. Double-check your private health insurance policy and keep your statements handy.
4. Work-related expenses—don’t sell yourself short
Many Australians assume that if they use something for both work and personal reasons, they can’t claim it. Not true!
If you use your laptop 60 per cent for work and 40 per cent for Netflix, you can claim 60 per cent of the cost (or depreciation, if it’s over $300). The same goes for your phone, internet, and other mixed-use items.
Raso said, ‘Any expense that you’re claiming, you can apportion a personal element to it and just claim whatever percentage is for work. It doesn’t mean that you can’t claim it.’
The ATO expects you to be reasonable and keep records to support your claims. A simple log or diary for a representative four-week period can help you determine your work-related percentage.
Bonus tip: Car expenses—keep a proper logbook
You can claim a deduction for using your car for work (not just commuting). But you need a logbook to prove your claim if you travel more than 5,000 km for work in a year.
This isn’t just about jotting down your kilometres—you’ll also need to keep receipts for fuel, oil, servicing, and other car expenses, or at least odometer readings.
The logbook method can be more lucrative than the cents-per-kilometre method, but requires more effort.
Your logbook must cover at least 12 continuous weeks and be updated every five years or when your work pattern changes.
The golden rule is to keep your records, no matter what you claim. The ATO can ask for evidence up to five years after you lodge your return. That means receipts, invoices, bank statements, and logbooks. If unsure, a registered tax agent can help you get it right.
Have you ever made a tax-time blunder? Or do you have a clever tip for maximising your refund? Share your stories and questions in the comments below.
Also read: EOFY rush sparks costly tax mistakes—are you falling for them? ATO warns
