Expert reveals common mistakes people make when lodging their return

As tax time approaches a financial expert reveals five common mistakes many Australian’s make when lodging their returns. 

Despite filling out tax returns every year, many Australians are making silly errors that get them stuck in a tax trap.

Michelle Maynard, a partner at Perth’s Carbon Accountants and Business Consultants warned that there are five common mistakes that catch Australian workers, News.com reported.

Michelle Maynard (pictured) shares the five big tax errors that Australians often make a tax time

Maynard wanted to share her tips to help debunk commonly held tax myths to ensure Australian’s make the most of their tax return.

‘One of the biggest misconceptions I love to dispel is the idea that you get $1 back for every $1 you claim as a deduction — but you’re only getting what your tax rate is, so the most you’ll get back is 45 cents out of a dollar spent, but that’s only if you’re earning over $180,000 a year,’ she said. 

For example, if you’re earning $37,000 a year, you’ll only receive 19 cents out of every dollar sent back.

This is the trap – people think they’ll receive all the money back at tax time and use it as an excuse to go on a shopping spree. 

You can only file a tax claim for clothing that is an identifiable branded uniform - not for your typical black pants that anyone can buy

You can only file a tax claim for clothing that is an identifiable branded uniform – not for your typical black pants that anyone can buy

Maynard argues that clothing is another common tax misconception was being able to claim the costs of clothing, whether purchased or for laundry costs. 

Many Australians think that purchasing black works pants or laundry services would entitle a tax claim.

The same goes for retail workers who wear their brand’s clothes as the items are available to the general public.

The ATO thoroughly monitors claims on phone bills - the claim must come with proof that calls were made in relation to work

The ATO thoroughly monitors claims on phone bills – the claim must come with proof that calls were made in relation to work

‘It’s also the same for standard black shoes for waiters, for example — if it’s not an identifiable branded uniform, then you can’t claim the purchase price or laundry,’ Maynard said.

Another sneaky claim Australians often try to make is their internet and phone bills. 

ATO monitors this thoroughly and a few work calls from home are not sufficient for this tax claim.  

Maynard recommends that students work in their study field as they might be able to claim thousands on course fees

Maynard recommends that students work in their study field as they might be able to claim thousands on course fees

An important myth is about the $300 receipt-free threshold.

‘Individuals think they can claim deductions without receipts as long as each item is under $300, but that’s false. Once the total claims exceed $300, you need receipts,’ Maynard said. 

The ATO may still ask for proof when under $300 and you will need to tell them how you worked out your claim – an important point to take into consideration.

Maynard said that lots of Australians weren't aware of other work-related deductions. For example, if you work in the sun, you can claim on cosmetics with SPF

Maynard said that lots of Australians weren’t aware of other work-related deductions. For example, if you work in the sun, you can claim on cosmetics with SPF

Maynard said that many people are often unaware of deductions they could claim for work-related purposes.

For example, a bag that carries work documents and laptops could be claimed.

If you work outside, you can claim deductions on make up and cosmetics that contain SPF.   

 



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