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News.com.au
a day ago
- Business
- News.com.au
‘Misconception': Big mistake Aussies make with their tax return
Cost-of-living pressures are tipped to cause millions of Australians to lodge their tax returns early this year, but such a move could cost them in the long run. According to CPA Australia, taxpayers will rush through their returns to try to get a refund as soon as possible, but this could mean they make mistakes or underclaim everything that they are entitled to. CPA Australia tax lead Jenny Wong said Australians often rushed to get their money back from the tax man. 'Cost-of-living pressures could mean some people are eager to lodge their tax return as quickly as possible to access a refund, but it's important to be patient, gather your evidence and claim everything you are entitled to,' she said. 'There's a misconception that lodging early means you'll receive your refund first, but it's not as simple as that. It's common for people who lodge early to end up having to amend their returns later anyway, so it's best to wait.' According to H & R Block director of tax communications Mark Chapman, Australians are likely to take short cuts when it comes to their tax returns. While the MyTax model was praised for its simplicity, Mr Chapman said it was costing taxpayers on average $525.50. 'If you've started a side hustle, invested in shares, bought property or even just worked from home – your return is no longer simple, 'Mr Chapman said. 'The ATO doesn't tell you what you're entitled to claim – that's up to you. And in a year where budgets are stretched, getting it right can make a real difference. Finder survey data estimates that one in three Aussies need a cash injection this financial year. Finder head of consumer research Graham Cooke said Aussies were eagerly awaiting their tax refunds, set to arrive from July 1. 'Many households living month-to-month will be particularly keen to access these funds,' he said. 'For those struggling with the rising cost of living, a cash boost will offer some necessary financial reprieve.' Ms Wong said another common mistake people made was not giving enough thought to how their circumstances had changed over the past 12 months. 'Some people go into autopilot when they do their tax returns,' she said. 'They cut and paste from their last return and fail to consider any changes to their personal circumstances. 'Turn off the autopilot and take time to seriously consider what's different about your expenses this year and think about what you could claim.' Ms Wong also explained there were several ways Australians could save more money. 'Remember that you have until June 30 to purchase any work-related items and claim the deductions this year,' she said. 'So, if you need any equipment for your home office, like a new desk or computer chair, or maybe you need to replace your old work tools, do it before the end of the financial year. 'Individuals can claim an immediate deduction for items they need for work that cost $300 or less, so long as your employer does not reimburse you for that expense.'
Daily Mail
26-05-2025
- Business
- Daily Mail
Expert reveals the biggest mistake Aussies can't afford to make at tax time
Aussies who rush to get their tax return in early are making a huge mistake, a peak accountancy group has warned. As the end of the financial year looms, income earners can claim up to $300 worth of work-related expenses, excluding travel, without the need for receipts. Manually claiming work expenses is often time consuming and many Aussies are tempted to complete their return as soon as possible on July 1 to get a quick tax refund so there's money in the bank to pay those bills. But Jenny Wong, the tax lead with CPA Australia - representing Certified Practising Accountants - said those who rushed to fill out their tax return could be missing out on important deductions. ' Cost of living pressures could mean some people are eager to lodge their tax return as quickly as possible to access a refund, but it's important to be patient, gather your evidence and claim everything you are entitled to,' she said. 'Firing the starting pistol on your tax return too quickly means you could end up shooting yourself in the foot. Failing to claim everything you're entitled to means less cash back than you could otherwise get.' Now is the time to chase up all those receipts to save the hassle later. 'Hopefully your receipts aren't down the back of the couch, but they might be in your emails and phone apps. Or maybe the junk draw?' Ms Wong said. Travel expenses Ms Wong said those filing their tax return too early were more likely to miss out on travel expenses incurred on the job. 'Maybe you travelled more for work and were not reimbursed by your employer for meals or other travel essentials,' she said. While it's possible to make a total claim on tax if the deductions are less than $300, this shortcut doesn't cover travel allowance, meal allowances, or the use of a car. That means workers whose employer gives them a travel allowance, also known as an award transport payment, can also make a claim if travelling for work still left them out of pocket after a workplace allowance. 'Any out-of-pocket work-related expenses could be tax deductible, but you'll need evidence in case you are asked in an audit. Think about what you've had to purchase for work. Check your bank statements,' Ms Wong said. Those using their car also need to identify which travel is used for work. 'For vehicle expenses, you must be able to identify and justify the percentage that you are claiming as business use,' Ms Wong said. 'To claim accurately, you will need to use a logbook or diary to show private versus business travel.' Buying new work tools Rushing a tax return could also jeopardise the expense of work-related items. Those working from home can claim the cost of a desk or a chair worth up to $300 in one financial year. If the item is worth more than $300, the item can be claimed on tax over several years, based on how long it's likely to last for. The same $300 rules applies to buying tools needed for the job. 'Or maybe you started a new job where you had to buy tools, subscriptions, or pay for training and security clearances, for example,' Ms Wong said. Australians have until June 30 to buy any essential work items to be able to claim the deduction for the 2024-25 financial year. Working from home claim Those working from home can multiply by 70 cents the number of hours they worked from where they lived in 2024-25. This method also requires daily diary keeping. H&R Block calculated the typical Aussie working from home would claim 1,095 hours over the financial year, adding up to $767. Or they can alternatively use the actual cost method, based on add up electricity and internet bills. 'Which work-from-home expense type makes most sense for you - fixed rate or actual cost method? If you've been good at keeping records throughout the year, the actual cost method may be more beneficial,' Ms Wong said. Tell the truth Those who lied about their work expenses are more likely to face an audit from the Australian Taxation Office. 'Getting your tax return right is your responsibility,' Ms Wong said. 'This means declaring all of your income and claiming the appropriate expenses. 'Failure to properly declare your income increases your chances of being audited by the ATO.'
Yahoo
26-05-2025
- Business
- Yahoo
ATO warning ahead of $1,288 cost-of-living cash boost: 'Shooting yourself in the foot'
Millions of Australians will soon be able to lodge their tax returns with the Australian Taxation Office (ATO), and many will be given a decent cash boost in the form of a tax refund. However, Aussies have been urged to go slow and make sure everything is filled out correctly. Financial institution CPA Australia said too many people leap at the opportunity to submit their tax returns on July 1, which is the first day you're permitted to do so. But CPA Australia's tax lead, Jenny Wong, said this wasn't the best idea. 'Firing the starting pistol on your tax return too quickly means you could end up shooting yourself in the foot," she said. Forgotten ATO deductions that can boost your tax refund by $974 Most in-demand tradie jobs paying nearly $3,200 per week amid crisis: 'Shining a light' Major backflip from world's most cashless country as Australia mulls money law 'There's a misconception that lodging early means you'll receive your refund first, but it's not as simple as that. "It's common for people who lodge early to end up having to amend their returns later anyway, so it's best to wait. It'll save you in the long run.' She said the cost-of-living crisis had understandably made some people desperate for this tax refund. Finder data from last year revealed the average expected refund was $1,288 per one in four people were planning on using that money to pay for an essential expense like a household bill or insurance. A further 4 per cent said they would put it towards their credit card debt, while one in 10 would chuck it on their mortgage. While you might want to get your refund as fast as possible, you need to wait until your employer and private health insurer have provided the necessary details so that your tax return contains all the right information. That can take several weeks, so you might have to wait until late July or early August to lodge your tax return. CPA Australia also said you need to make sure your tax return was reflective of what you've spent and earned in the last 12 months and isn't just a repeat from last time. 'Some people go into autopilot when they do their tax returns,' Wong said. 'They cut and paste from their last return and fail to consider any changes to their personal circumstances. 'Turn off the autopilot and take time to seriously consider what's different about your expenses this year and think about what you could claim." You might have travelled more for work this financial year compared to last, or your work-from-home expenses might have changed. Wong explained that these types of expenses can fluctuate from year to year, and you could be missing out on some much-needed money if you didn't accurately reflect that change in your tax return. "Maybe you started a new job where you had to buy tools, subscriptions, or pay for training and security clearances, for example," Wong added. The ATO has a good guide for what you could list as expenses depending on your industry and job. CPA Australia said you should "strongly avoid" asking AI platforms like ChatGPT for tax advice as it could steer you in the wrong direction. 'Getting your tax return right is your responsibility,' Wong said 'Failure to properly declare your income increases your chances of being audited by the ATO. "Failing to claim everything you're entitled to means less cash back than you could otherwise get.'
Yahoo
13-05-2025
- Business
- Yahoo
‘Simply wrong': Warning for taxpayers
Taxpayers are being warned just because someone has a large following, it doesn't make them a tax expert, with TikTok 'Finfluencers' and AI being called out ahead of the end of financial year. With tax season approaching, the accounting industry body warns of the pitfalls of getting free advice from social media platforms, noting Aussies face big fines and prosecution if they falsify their tax return. Chartered Accountants Australia and New Zealand tax lead Jenny Wong, said it's concerning many Aussies will watch this content and assume they are getting free expert advice. 'In many cases the advice from these accounts is simply wrong. In other cases, the claims have an ounce of truth but would apply only to a very small group of workers,' she said. According to Ms Wong, getting bad tax advice could result in missing out on legitimate entitlements or worst still, big fines and even prosecution. CPA Australia took aim at some of the TikTok users' advice, including claiming a pet as a 'guard dog' while working from home. Another claimed they can deduct the cost of a luxury handbag by telling the ATO it is used as a work bag, while a third told Australians they can claim thousands in fuel rebates without a receipt. 'Exaggerating a claim can have consequences. Making false tax claims could result in hefty fines, a criminal record or even imprisonment. Arguing that you took advice from a finance influencer on TikTok won't cut it – your tax is your responsibility,' she said. Ms Wong also warned ChatGPT and other OpenAI tools which should also be treated with caution. 'Nothing can beat the sound advice of a professional tax agent,' she said. 'AI tools are only as good as the information you put into them. It may be tempting to ask AI bots for tips, but they are simply not able to compute the nuances of the Australian tax system or your specific circumstances.' Instead of relying on tax tips online Ms Wong offers: Be thorough: Take time to gather your receipts, logbooks and any other evidence to support your work-related expense claims. Check what type of expenses you could claim that are relevant to your work. The ATO has a comprehensive guide to industry and occupation types. Time is on your side: You have until June 30 to purchase any items you need for work and can claim the deductions this year. Don't rush: Lodging your tax return early does not mean you'll get your refund first, but could mean you make mistakes. Remember: the cost of seeking professional tax advice for your tax return is tax deductible. Sign in to access your portfolio
West Australian
13-05-2025
- Business
- West Australian
Facing prosecution: Aussies warned against taking ‘Finfluncer advice'
Taxpayers are being warned just because someone has a large following, it doesn't make them a tax expert, with TikTok 'Finfluencers' and AI being called out ahead of the end of financial year. With tax season approaching, the accounting industry body warns of the pitfalls of getting free advice from social media platforms, noting Aussies face big fines and prosecution if they falsify their tax return. Chartered Accountants Australia and New Zealand tax lead Jenny Wong, said it's concerning many Aussies will watch this content and assume they are getting free expert advice. 'In many cases the advice from these accounts is simply wrong. In other cases, the claims have an ounce of truth but would apply only to a very small group of workers,' she said. According to Ms Wong, getting bad tax advice could result in missing out on legitimate entitlements or worst still, big fines and even prosecution. CPA Australia took aim at some of the TikTok users' advice, including claiming a pet as a 'guard dog' while working from home. Another claimed they can deduct the cost of a luxury handbag by telling the ATO it is used as a work bag, while a third told Australians they can claim thousands in fuel rebates without a receipt. 'Exaggerating a claim can have consequences. Making false tax claims could result in hefty fines, a criminal record or even imprisonment. Arguing that you took advice from a finance influencer on TikTok won't cut it – your tax is your responsibility,' she said. Ms Wong also warned ChatGPT and other OpenAI tools which should also be treated with caution. 'Nothing can beat the sound advice of a professional tax agent,' she said. 'AI tools are only as good as the information you put into them. It may be tempting to ask AI bots for tips, but they are simply not able to compute the nuances of the Australian tax system or your specific circumstances.' Instead of relying on tax tips online Ms Wong offers:
