Every year, as tax time rolls around, we see the same questions—and the same mistakes—come up again and again. While individual tax returns might seem straightforward, small misunderstandings can lead to missed deductions, incorrect claims, or unnecessary ATO attention.
Here are some of the most common tax time mistakes that we see:
“I Don’t Need to Declare That Income”
This one catches people out more than you’d expect. Income from side hustles, investment platforms, crypto, or even cash jobs generally still needs to be declared.
The ATO receives data from multiple sources, so it’s much easier for discrepancies to be identified than it used to be.
“I Can Claim Anything Work-Related”
A common misconception is that if something is even loosely related to your job, it’s deductible. In reality, the expense must be directly related to earning your income, and you must have paid for it yourself (and not been reimbursed).
For example, everyday clothing—even if you wear it to work—is generally not deductible unless it’s a uniform or protective clothing.
“If I Didn’t Get a Receipt, I Can Still Claim It”
You need records to substantiate your claims. While there are limited exceptions for small claims, relying on estimates or “ballpark” figures is risky. The ATO is increasingly data-driven, and unsupported claims can be flagged.
“I Can Claim All My Car Travel”
Car expenses are one of the most misunderstood areas. Many people assume that if they use their car for work at all, they can claim everything—including travel to and from work.
In reality, your regular commute is not deductible. Travel between home and your usual workplace is considered private.
However, you may be able to claim:
- Travel between different work locations
- Travel to see clients or attend meetings
- Travel from home to an alternative work site (in certain situations)
You also need to use the correct method (cents per kilometre or logbook) and keep appropriate records. Overclaiming car expenses is a common trigger for ATO review.
“Working From Home Means Big Deductions”
Working from home does open up deductions—but they still need to be reasonable and calculated correctly. Whether you use the fixed rate method or actual costs, you need to keep appropriate records (like a diary of hours worked from home).
It’s not a free-for-all, and overclaiming in this area is a common issue.
“My Accountant Will Just Fix It”
Your accountant can only work with the information you provide. Missing details, incomplete records, or assumptions can lead to incorrect returns.
The more organised your information is, the more accurate—and often more tax-effective—your return will be.
“Tax Time Is When I Think About Tax”
Leaving everything until after 30 June limits your options. By the time you’re lodging your return, most opportunities to legitimately reduce your tax bill have already passed.
Good tax outcomes come from planning during the year—not scrambling at the end.
The Bottom Line
Most tax return mistakes aren’t intentional—they come down to misunderstandings. But getting it wrong can lead to missed deductions, amendments, or unwanted ATO scrutiny.
If you’re unsure what you can and can’t claim, or want to make sure your return is done right the first time, get in touch with our team—we’re here to help make tax time simple and stress-free.
