Australians will soon begin submitting their tax returns with the Australian Taxation Office (ATO), and many are hoping for a financial boost. However, tax experts are advising individuals to ensure they properly claim all eligible deductions, as failing to do so could lead to a loss of hundreds of dollars.
New research from H&R Block indicates that Australians, on average, might be missing out on $525.50 in deductions. This issue is particularly prevalent among those who self-lodge their returns through the ATO’s MyTax portal, with 66 per cent of these individuals overlooking potential claims.
Mark Chapman, H&R Block’s director of tax communications, emphasised the importance of this money, stating, “In a year when every dollar counts, that’s money Australians can’t afford to leave behind." He noted that the landscape of personal finances has become more complex due to factors like side hustles, share investments, property purchases, and remote work, making meticulous tax filing essential.
The survey revealed that one in three Australians only discovered they had missed deductions after submitting their tax returns, resulting in a lost opportunity for that financial year. Therefore, experts urge taxpayers to avoid the temptation of filing their returns immediately after the end of the financial year on July 1. Waiting to lodge allows the ATO to gather necessary data on wages, bank interest, private health insurance, dividends, and government payments, which can then be pre-filled in the myTax portal.
Last year, approximately three million tax returns were lodged by July 23, which jumped to 5.8 million by August 20.
Car expenses are typically the largest category of work-related claims, amounting to $10.3 billion from 3.6 million taxpayers in the 2023-24 financial year. Meanwhile, clothing-related claims, filed by 6.5 million individuals, totalled $2.2 billion.
Financial expert Ben Nash noted that many taxpayers overlook significant tax deductions, potentially missing out on hundreds or thousands of dollars. He pointed out some commonly forgotten claims:
- Work-related education expenses: Costs associated with short courses, workshops, and online learning can be claimed.
- Work from home expenses: Using the actual cost method may offer larger deductions compared to the fixed rate option.
- Income protection insurance premiums: These can be deducted if they are outside a superannuation fund.
- Investment-related expenses: Costs related to investments, such as loan interest, property management fees, and financial adviser fees, are deductible.
- Professional memberships and subscriptions: Memberships for professional bodies and subscriptions for relevant publications and tools are also deductible.
Chapman noted that rental property expenses, including gardening, pest control, and bank fees, are often unclaimed, along with additional concessional contributions to superannuation. Taxpayers who employed tax professionals for their previous year’s returns can also deduct those fees in the current year.
Taxpayers can refer to the ATO’s online resources for detailed information on eligible claims. As the tax season approaches, the call for Australians to ensure thoroughness in their deductions grows ever louder.
To stay informed on financial matters, follow Yahoo Finance on Facebook, LinkedIn, and Instagram.
