Most read
‘Optimistic borrowers’ could endanger housing market, RBA says...
‘Optimistic borrowers’ could endanger housing market, RBA says...
Latest Podcast
Home values up 30% (or are they); NFTs taking the world by storm, and why Keatin...
Home values up 30% (or are they); NFTs taking the world by storm, and why Keatin...
Resources
There is $17.5 billion in lost and unclaimed super across ...
There is $17.5 billion in lost and unclaimed super across ...
Save
The tax traps creating $53 million in errors
The Tax Office has released common mistakes that are catching out Australians this tax season, resulting in $53 million worth of errors since 1 July.
The tax traps creating $53 million in errors
The Tax Office has released common mistakes that are catching out Australians this tax season, resulting in $53 million worth of errors since 1 July.
In July and August, close to 5.8 million tax returns were lodged by either tax agents or by taxpayers themselves, with over $11.9 billion in refunds processed, $270 million more compared with the same time period last year.
However, according to ATO commissioner Kath Anderson, the Tax Office had to correct more than 112,000 tax returns, totalling more than $53 million.
“Our investment in advanced analytics is allowing us to closely scrutinise more returns than ever before, and make immediate adjustments where taxpayers have made a mistake. In the first half of tax time, the ATO’s analytics and compliance models automatically adjusted more than 112,000 tax returns to correct mistakes in returns, totalling more than $53 million,” said Ms Anderson.
According to Ms Anderson, most of the adjustments were “simple mistakes”, including not declaring all income, and over-claiming deductions.
“Most of the income adjustments we are making at the moment are for simple mistakes, like leaving out bank interest or salary and wages. But for some, it seems their priority was on generating a refund rather than getting it right, as they have deliberately ignored the pre-fill information that was available at the time of lodgement,” she said.
“We are also seeing some taxpayers over-claiming deductions, with insurance premiums emerging as a new area where taxpayers need assistance. Just to be clear, premiums for income protection insurance are tax deductible, but premiums for other insurances like life, permanent disability and trauma are not.
“We are happy to see that so many taxpayers are confident to lodge early. However we are seeing some people continue to make simple mistakes or try to game the system to secure a refund.”
Earlier this year, the ATO launched one of its biggest ever education campaigns for taxpayers, highlighting some common mistakes per profession.
For example, police officers are not allowed to claim a deduction on haircuts, grooming, or fitness expenses, even though they may be covered by specific regulations.
Flight attendants can claim overnight travel costs where they have not been reimbursed but cannot claim a deduction for things like hairdressing, cosmetics, and hair and skin care products.
Further, workers within the building and construction industry cannot claim clothes or shoes that are not uniforms or are not designed to provide you with sufficient protection from the risk of injury at your worksite, even if the item is called ‘workwear’ or ‘tradie wear’ by the supplier.
“We want every taxpayer to have the information they need to know whether they can make a claim, to get it right, and know what records they need to keep. Understanding what you can and cannot claim will help ensure that your tax return is processed quickly and any refund is paid as soon as possible,” said Ms Anderson.
Read more on common tax traps.
Tax saving
How are Australians planning on spending their tax savings?
Essential bills, savings accounts, Christmas gifts and exchange-traded funds appear to be the big winners from the latest round of tax cuts, new research has revealed. ...Read more
Tax saving
First in the world: SA imposes EV tax
The South Australian government is the first government in the world to introduce an electronic vehicles tax following an announcement by the treasury. ...Read more
Tax saving
5 tips as tax deadline looms
Australians are being warned that they have just two weeks left to get their finances in order if they have not posted a tax return yet. ...Read more
Tax saving
ATO warns businesses of JobKeeper scam
The ATO is warning the community about a JobKeeper scam which is asking members to enter personal information. ...Read more
Tax saving
Why fast-tracking tax cuts won’t stimulate the economy
Treasurer Josh Frydenberg has flagged that previously legislated tax cuts could be moved forward in a bid to help stimulate the Australian economy. ...Read more
Tax saving
Last-minute items to check off before 30 June
With the end of the financial year almost here, an accounting firm has outlined key changes with tax returns this year and flagged some last-minute tax strategies to consider before 30 June. ...Read more
Tax saving
Australia’s richest owe the Tax Office $772m
Australia’s elites and private companies fell $772 million in taxes due to miscalculations and deliberate tax avoidance, the Australian Taxation Office has revealed. ...Read more
Tax saving
Do you have to pay taxes on a trust?
Trusts are usually set up for business, estate planning and investment purposes to separate the legal and beneficial ownership of assets held within the structure. ...Read more
Home values up 30% (or are they); NFTs taking the world by storm, and why Keating thinks Aussies will be ‘poor’ in retirement
Listen now
Raging floods, the tech stock bubble and the ongoing SG debate
Listen now
Meet the Manager with Trilogy’s Philip Ryan: RBA rates and property price growth
Listen now
The continued property boom, ethical investing and engaging with your super fund
Listen now
Tax saving
How are Australians planning on spending their tax savings?
Essential bills, savings accounts, Christmas gifts and exchange-traded funds appear to be the big winners from the latest round of tax cuts, new research has revealed. ...Read more
Tax saving
First in the world: SA imposes EV tax
The South Australian government is the first government in the world to introduce an electronic vehicles tax following an announcement by the treasury. ...Read more
Tax saving
5 tips as tax deadline looms
Australians are being warned that they have just two weeks left to get their finances in order if they have not posted a tax return yet. ...Read more
Tax saving
ATO warns businesses of JobKeeper scam
The ATO is warning the community about a JobKeeper scam which is asking members to enter personal information. ...Read more
Tax saving
Why fast-tracking tax cuts won’t stimulate the economy
Treasurer Josh Frydenberg has flagged that previously legislated tax cuts could be moved forward in a bid to help stimulate the Australian economy. ...Read more
Tax saving
Last-minute items to check off before 30 June
With the end of the financial year almost here, an accounting firm has outlined key changes with tax returns this year and flagged some last-minute tax strategies to consider before 30 June. ...Read more
Tax saving
Australia’s richest owe the Tax Office $772m
Australia’s elites and private companies fell $772 million in taxes due to miscalculations and deliberate tax avoidance, the Australian Taxation Office has revealed. ...Read more
Tax saving
Do you have to pay taxes on a trust?
Trusts are usually set up for business, estate planning and investment purposes to separate the legal and beneficial ownership of assets held within the structure. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
