The most common tax return mistakes are easily detected by the ATO. Every year they work hard to find differences in your tax return. Let’s see what are the most common mistakes when making your tax return.

1) You haven’t declare all of your income

This is a big mistake. Be sure to declare all of your income, including your salary, capital gains or bank interests, because the ATO knows exactly about the money you receive. The ATO obtains information from third parties such as institutions that pay interests and dividends, your employers and overseas tax offices, etc.

At this point, the ATO uses this information to match what have you declared in your tax return, so, if they find any difference between what have you declared and the information obtained from the third parties, you will be subject to an audit to explain the existing differences, notwithstanding to obtain a penalty or a fine.

2) Your deductions are claimed incorrectly

Some of the most common deductions you incorrectly claim are:

  • Deductions for personal expenses: Self-education, home office, car expenses, items you use part for work and part personally.
  • Deductions for something you never pay for.
  • Deductions for rental property expenses when you were using the property yourself.

3) You make-up deductions

Do not inflate deductions just to obtain more refund. If your deductions claimed are found to be incorrect, you will be required to repay the tax avoided, plus an interest of an about 9% a year. Also, If the ATO believes that you have acted carelessly, you may be charged with a penalty of between 25% and 95% of the tax avoided.

4) You have an existing ATO or other government debt

If you have an existing debt with the ATO, Family Assistance Office, Centrelink or any other Government agency, the ATO may delay your tax return refund in order to pay down first those agency debts.   

5) You have old overdue tax returns

In this case the ATO can delay processing your tax return while they expect you to get your obligations up to date.

6) You haven’t updated your personal details

Could be for example, when your name has changed since your last tax return because you got married, but you haven’t notify this to the ATO. Also,could be  if you haven’t include your spouse in your tax return or their name is wrong.

In those cases, the ATO could delay your return, while they are verifying your identity, as your details no longer matches with their records.

7) You don’t include your bank account details

No bank details, no refund. The ATO doesn’t send out refund cheques these days so you need to include your bank details in your return.

8) You rely on pre-filled data from the ATO

These day, you can pre-filled lots of your income information straight away from the ATO’s system just by pressing a button. But be careful, and don’t assume that income data is correct or complete. Always check and use your own information (payment summaries, invoices, etc.). Some people assume that because this information comes straight away from the ATO could be 100% correct, but is a dangerous assumption.

More information

Avoid to get either a lower refund or an ATO penalty, and trust in our professionals to help you to complete your tax return. You can contact us at [email protected] , or call us to (+ 61) 2 8317 1281.