7 Best Common Tax Mistakes to Avoid in Liverpool Sydney, NSW
Getting your tax return right can feel like a bit of a juggling act. But making mistakes can be costly, and even minor errors could lead to delayed refunds or penalties. Let’s dive into some common tax mistakes you should avoid, and how getting it right can save you time, stress, and money.
1. Overclaiming Deductions
One of the most common traps is claiming deductions you’re not actually entitled to. It’s tempting to inflate work-related expenses, especially if you’re chasing a bigger refund. But here’s the catch: You can only claim expenses directly related to earning your income, and you must have proof like receipts or invoices. For example, driving to work isn’t claimable, but if you drive between work sites, that is. Make sure you’re clear on what counts as a legitimate deduction.
Pro tip: If an expense is partly work and partly personal, only claim the portion that’s work-related. And remember, items under $300 can usually be claimed immediately, but anything over needs to be spread out over a few years.
2. Relying Too Heavily on Pre-Filled Data
The ATO provides pre-filled information, but that doesn’t mean it’s complete or entirely accurate. You still need to double-check details like your income, deductions, and interest earnings. If there’s a mistake, the blame won’t fall on the ATO—it’ll be on you. So, always cross-check with your payment summaries and other documents.
Stat Alert: In 2023, over 30% of tax disputes with the ATO stemmed from incorrect income data, often due to blind reliance on pre-filled info.
3. Forgetting the Basics
Basic errors can easily throw a spanner in the works. If you’ve changed your address or name, update the ATO beforehand. Misspelling your name or providing the wrong bank details can also cause headaches. Refunds aren’t issued as cheques anymore, so getting your bank account number right is crucial!
Pro tip: Before you hit submit, double-check that everything matches up with your Tax File Number (TFN). A small slip-up here can send your return into the ATO’s “black hole,” leading to delays.
4. Missing Out on Legitimate Deductions
While overclaiming can get you into trouble, underclaiming means you’re potentially leaving money on the table. For example, many people forget to claim expenses related to working from home, such as electricity or depreciation on office equipment. If you’re unsure about what you’re entitled to, it’s worth getting professional advice.
5. Not Getting Help When You Need It
Tax can be tricky. A lot of people in Liverpool find it less stressful to hand everything over to a tax agent. In fact, 60% of Australians use a tax agent to prepare their returns. It’s not just about saving stress; a good agent can identify deductions you might not even be aware of. And the best part? Their fee is tax-deductible!
Pro tip: If you’re working with a tax agent, organise your documents beforehand. It’ll save you time and help your agent maximise your return.
6. Claiming Personal Expenses as Work-Related
This is a common mistake that could land you in hot water with the ATO. For example, buying clothes for work doesn’t mean you can claim them, even if you wear them at your job. Only specific uniforms or protective clothing are deductible. If you’re a chef, buying meals at a restaurant to “check out the competition” isn’t a work-related cost—it’s just lunch!
7. Misjudging Self-Education Costs
If you’re studying to enter a new field of work, those costs aren’t tax-deductible. For instance, if you’re working part-time in retail while studying to be a pharmacist, the education expenses aren’t claimable. The rule is that the education must be directly linked to your current job.
Wrapping It Up
Doing your tax return right the first time can save you a world of stress. Liverpool is full of hardworking people, and it’s easy to miss something or make an honest mistake. But with a little attention to detail—and some help from the pros—you can avoid common traps and make sure you’re getting the most out of your return.
If you’re unsure, don’t hesitate to reach out to a tax agent. They’re not just there to save you time; they can save you money too! And hey, wouldn’t it be nice to have that peace of mind while knowing you’re in the clear with the ATO?
Get a Free Tax Consultation in Liverpool, NSW
Navigating tax issues can be tricky, but you don’t have to do it alone. At Number Solutions, our expert tax accountants in Liverpool are here to simplify the process and help you maximise your tax returns. Whether you need advice on deductions, help with tax planning, or support with ATO compliance, our experienced team is ready to assist you every step of the way.
Give us a call today for a free consultation with us, and let’s work together to get your taxes sorted smoothly and confidently. We’re just a phone call away, ready to answer your questions and offer the tailored tax solutions you need.
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