Aussies’ Tax Return Traps: 20 Errors to Sidestep for a Smoother Tax Season

Each year, countless Australians submit their tax return to the ATO. According to the Australian Taxation Office (ATO), over 9 million people had already lodged theirs by late October 2024, while around 1.5 million were still left to file.

Tax time can be confusing. We think we’ve done everything right, but sometimes small mistakes sneak in. A missed number, a wrong claim, or forgetting to add income can cause delays or even lead to audits and fines.

We get it, nobody enjoys paperwork. But if we don’t take care, those little slip-ups can cost us big. The good news? Most of these errors are easy to avoid.

We’ll guide you through some of the most frequent tax slip-ups Australians tend to make. We’ll explain what goes wrong and how to fix it. Whether you’re a first-time filer or someone who’s done it for years, it’s worth knowing what traps to sidestep. A smoother tax season starts here.

Let’s explore 20 tax slip-ups Australians often run into, and smart ways you can avoid them for an easier, stress-free tax season.

1. Forgetting to Report Side Income

Money from Uber, tutoring, freelancing, or Airbnb must be reported. The ATO uses data-matching systems to spot income that hasn’t been reported correctly. If you earned it, it needs to be declared.

2. Lodging Too Early

In July 2024, over 142,000 returns were changed after being filed too soon. Wait until late July so all pre-fill data (income, health funds, etc.) is accurate.

3. Overclaiming Work Deductions

The ATO reported $28 billion in claims in 2023–24. About 1 in 5 were either inflated or invalid. Claim only what’s directly related to your work.

4. Missing Receipts or Records

No proof? No deduction. Over 70% of denied claims lacked receipts. Keep a digital record using apps like myDeductions or cloud folders.

5. Claiming Personal Costs as Business

You can’t claim Netflix, pets, or everyday clothes. Even items like phones or laptops must be split between work and personal use, based on actual use.

6. Rental Property Errors

In 2024, 90% of rental tax claims audited had mistakes. Watch out for misreporting interest on loans or claiming renovations as repairs.

7. Not Declaring Crypto or Investments

Over 1.2 million Aussies are now trading crypto. The ATO is watching closely. Every gain or loss from crypto, shares, or ETFs must be declared, even small ones.

8. Using Outdated Bank or TFN Info

Providing incorrect bank details may hold up your tax refund and cause delays in payment. Check all personal details before submitting, including Tax File Number and contact information.

9. Incorrectly Reporting Spouse Income

If you get benefits or rebates, your partner’s income affects your tax. Misreporting it can lead to reduced offsets or unexpected repayments.

10. Medicare and Health Fund Errors

Private health fund data is often pre-filled, but not always correct. Double-check it. Mistakes here can trigger a Medicare Levy Surcharge.

11. Double-Dipping on Super Deductions

You can only claim super contributions you made yourself, not the ones your employer already paid. Before you claim the deduction on your tax return, be sure to lodge a “Notice of Intent to Claim” with your super fund.

12. Forgetting to Claim Legitimate Deductions

Lots of Aussies leave money behind by forgetting what they can claim. Think uniforms, home office tools, or union fees. If it’s related to work, it may count.

13. Claiming for Travel That Doesn’t Qualify

You can’t claim your normal travel to work. Only trips made for work purposes, like going to another job site, count. Keep a logbook or digital travel tracker.

14. Not Using the Correct Method for Home Office

Since COVID, work-from-home claims are more common. But you must pick one method (fixed rate or actual costs) and stick to it. No mixing.

15. Ignoring ATO Letters or Warnings

The ATO sends 500,000+ notices yearly for mismatches. Ignoring them can lead to fines, garnished refunds, or even audits.

16. Using Unregistered Tax Agents

Australia has over 45,000 licensed agents. But if your “finfluencer” isn’t registered with the Tax Practitioners Board, they can get you into legal trouble, and so can you.

17. Not Lodging on Time

Filing late can cost you. The ATO applies a $313 late fee that goes up every 28 days, reaching as much as $1,565. To avoid paying extra, make sure you file on time.

18. Skipping the Final Review

Don’t hit submit too fast. A quick check at the end can help catch typos, wrong numbers, or missed income. It takes 5 minutes, but saves days of delays.

19. Claiming Depreciation Incorrectly

This mostly affects property investors. You can claim depreciation, but not on second-hand assets in existing homes bought after 2017. Know the rules.

20. Guessing Instead of Knowing

Never guess numbers, especially income or deductions. The ATO receives your financial details from sources like banks, employers, and government agencies to check if everything adds up. Guessing wrong can raise red flags.

How to Avoid These Traps

✔️ Start late, but not too late: Wait until mid-July
✔️ Track expenses year-round: Use apps and digital records
✔️ Be accurate: Double-check income, deductions, and personal info
✔️ Use registered professionals: Licensed by the Tax Practitioners Board
✔️ Respond fast: Act on any ATO notices immediately

Conclusion

Every year, nearly 10 million returns are lodged. Errors put refunds and peace of mind at risk. By using these facts and figures, plus solid record-keeping, we can lodge smarter, smoother, and safer this tax season.

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Disclaimer:

This content is for informational purposes only and not financial advice. Always conduct your research.