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Daily Mail
10 hours ago
- Business
- Daily Mail
I'm a tax accountant and these are the four biggest mistakes you're making on your returns - and it's costing you money
Australians are forgetting to claim work-related expenses and often select the wrong work from home deduction in their tax returns. That's according to a leading taxation accountant who has singled out the top five errors taxpayers make as tax time approaches on July 1. Belinda Raso from Tax Invest Accounting said taxpayers are missing out on hundreds of dollars by making little mistakes. 'They just rush in and lodge way too early and usually don't claim what they are entitled to,' Ms Raso said. WFH deductions One of the most common tax mistakes involves deductions made for working from home. Ms Raso said people who WFH do not always apply for the maximum deductions they can receive. Work from home expenses can be worked out via two different methods: the fixed rate 'shortcut' method of 70 per cents per hour, or the actual cost method, where they calculate their total expenses. 'It is very important that you work out both methods to ensure that you're getting the largest possible deduction,' she said. 'Another thing that people forget to do is, if they are going by that fixed rate method of 70 cents per hour... they're forgetting to claim everything else, and this includes computer equipment, it includes furniture, it includes software, the list is endless.' Medicare levy surcharge The next mistake Australians often make is incorrectly recording their liability for a Medicare levy surcharge - the additional charge on taxpayers who do not have private health insurance. Ms Raso said that the tax office will change the return if they have proof workers are liable for the levy. Australians forget to work out the most savings-efficient method for determining their claimable work-from-home expenses, Ms Raso warned 'It is up to you to understand when you are and when you're not liable for this,' Ms Raso said. Work related allowances The experienced accountant said some Australians make a huge mistake by failing to claim work-related expenses, such as claiming goods that they use for both personal and work use. 'As an example, one of the most common ones is a computer or laptop,' Ms Raso said. 'You sit there and think, "well, I use this for both personal reasons and for work, I can't claim it then". That's not true. 'Any expense that you're claiming, you can apportion a personal element to it and just claim whatever percentage is for work. It doesn't mean that you can't claim it.' Logbook Her final tip was for Australians who use a personal vehicle for work purposes. She said workers should ensure they are recording their usage accurately in a logbook. 'If you are travelling over 5,000 kilometres for work, for actual work-related travel, you should be keeping a logbook,' Ms Raso said. 'But this is more than just tracking your kilometres in a logbook.' Workers should also keep records of their fuel and oil costs, or odometer readings. They will also need evidence of other car expenses.
Yahoo
12-06-2025
- Business
- Yahoo
Common tax mistake costing Aussies $1,000 on ATO refund: 'Out of pocket'
The biggest mistakes Australians make "every single year" on their tax returns have been revealed. Tax time is just weeks away, and Aussies are being warned these easy mistakes could cost them hundreds on their refund. Tax Invest Accounting director Belinda Raso told Yahoo Finance she sees taxpayers getting caught out by these mistakes every year. This could be because they have rushed their tax return and done it as soon as July 1 hits, or simply because they don't have all the information at hand. 'A big one is that we automatically go for a shortcut and a shortcut is never in taxpayers' favour,' she said. RELATED Major ATO change just weeks away as taxpayers warned over new rules Centrelink cash boost coming from July 1 for millions of Aussies Aussie teen's job paying $300 per hour without a uni degree Here are the top five mistakes to watch out for. If you are claiming work from home deductions, most Aussies forget to work out both methods to ensure they get the biggest possible deduction. The fixed rate method lets you claim 70 cents for each hour worked from home. The actual cost method requires you to calculate the additional expenses you incur when working from home. It is more onerous, but could give you a better deduction. Raso said people who claimed the fixed rate method often forgot they could make separate claims for expenses the method doesn't cover. The method only covers internet, mobile, electricity, gas, stationery and printing costs. 'So all of your computer equipment, the hardware, the software, your cords, cables, extensions, powerboards, your furniture, everything in that home office is going to be claimable,' she said. 'People that are working from home, even if they are hybrid, are losing hundreds of dollars per year on this alone.' Taxpayers report to the ATO whether they are liable for the Medicare Levy Surcharge. The ATO will also change people's tax returns if they are liable and don't declare it. For the 2024-25 financial year, the threshold to pay the surcharge is $97,001 for singles and $194,001 for families. Raso said she sees mistakes with people saying they are liable for the surcharge, when they actually aren't. This is usually single parent households who think they are classified as singles, but are actually classified as families even if their child isn't living with them. 'The average person could end up paying an extra $1,000 by not actually understanding these rules,' Raso said. Taxpayers can amend their returns if they have made a mistake and they have up to two years less one day from the notice of assessment. The third biggest mistake is made by Aussies who get a reimbursement or allowance from their work. This is particularly for people who have a motor vehicle kilometre allowance. While you can't claim a deduction on reimbursements, your employer might call it a reimbursement when it is technically an allowance. 'A reimbursement when you give an employer a receipt for fuel and they pay that in full. But if they are paying you a kilometre allowance, even if they say it's a reimbursement, it's not, it's just to cover your kilometres,' Raso said. 'If that kilometres is seen on your income statement, you're paying tax on it, so then you should be claiming the deduction against it because otherwise you're going to be claiming tax and just be out of pocket. You can claim what you have actually spent. Other common examples include mobile phone allowances and laundry allowances. Another mistake is not claiming expenses that people use for both work and personal purposes, such as a laptop or computer. Raso said some people mistakenly thought they couldn't claim a tax deduction at all, when in reality, they can apportion the personal use. 'We apportion what percentage we use for personal use and what's work use, and we claim that,' she said. For example, you can state you use a laptop 60 per cent of the time for work and 40 per cent of the time for personal purposes. The final common mistake is not keeping a correct logbook if you use your car for work. If you are travelling over 5,000 kilometres for work, Raso said you should be keeping a logbook. The ATO has two ways to claim deductions for motor vehicle expenses: the logbook method and the cents per kilometre method. The cents per kilometre method allows you to claim up to 5,000 business kilometres per car, per year. The logbook method allows you to claim more than 5,000 kilometres. 'You need to have a valid logbook for 12 weeks straight, which covers all of your motor vehicle usage. Then you need to have all your running costs as well,' Raso said. This needs to be done in the financial year you are claiming, so if you haven't already started on your logbook it would be too late to do in retrieving data Sign in to access your portfolio Error in retrieving data
Yahoo
06-06-2025
- Business
- Yahoo
ATO warning over tax deduction Aussies wrongly try to claim every year: ‘You can't'
Tax time is just around the corner and many Australians will be looking for ways to boost their refund or lower their tax bill. But the Australian Taxation Office (ATO) is warning people not to try and make a sneaky claim for makeup. Tax Invest Accounting founder Belinda Raso told Yahoo Finance that there were only very limited circumstances where people could claim their makeup and other personal grooming products. This applies even if you are expected to wear makeup at work. 'The only people that would be able to claim makeup is going to be performers and it has to be specific stage makeup. No one else is able to claim makeup,' Raso said. RELATED ATO data reveals $830 tax deductions millions of Aussies miss out on: 'Nothing' $4,400 ATO car tax deduction that most Aussies miss: 'Easy win' Centrelink $1,011 cash boost for Aussie farmers doing it tough: 'Get back on track' The ATO recently responded to a question about whether people could claim their makeup on tax. 'Generally speaking, no you can't,' the ATO warned. 'Personal grooming products (like makeup, skincare and hair care) are generally private expenses. This is even if your employer expects you to maintain a certain appearance.' Along with the exception for performers, the ATO said there may be an exception for some sun protection products, but only if your job requires prolonged outdoor work. Raso said another exception was for flight attendants. 'Flight attendants can actually claim hydrating products. Whether you're above the ground or under the ground, you can actually claim hydrating products for your skin and your hair,' she explained. 'But even though it's a requirement, they can't claim makeup.' The ATO said work-related expenses were one of the key areas on its hit list this year, along with working from home deductions and multiple income sources. ATO assistant commissioner Rob Thomson said work-related expenses needed to have a 'close connection' to your income, and you needed to be able to back it up. 'If your deductions don't pass the 'pub test', it's highly unlikely your claim would meet the ATO's strict criteria',' he said. 'Don't fall into the trap of thinking you can claim expenses like travel to and from work and childcare costs. 'These expenses are personal in nature and cannot be claimed. When in doubt look for guidance on the ATO website or speak with your registered tax agent.' Thomson urged people against just claiming expenses and hoping for the best, and noted that penalties and interest may apply. The ATO has a list of occupation specific guides that explain what you can and can't claim.
Yahoo
07-04-2025
- Business
- Yahoo
$20,000 ATO tax break win for millions of Aussies and tradies
Small businesses and tradies will be able to instantly write off at least $20,000 in expenses, in a win for the 'lifeblood' of the Australian community. Both major parties have committed to boosting the instant asset write-off tax break scheme should they win the upcoming federal election. Labor has committed to extending the $20,000 instant asset write-off for 12 months, which was due to revert to $1,000 from July 1, 2025. The Coalition has pledged to offer a permanent $30,000 instant asset write-off if elected. Tax Invest Accounting director Belinda Raso told Yahoo Finance small businesses were being hit from all sides when it came to their tax obligations and many were desperately in need of some support. RELATED ATO warning over new tool that 'catches out' cash jobs and dodgy deductions: 'Alarm' Superannuation cyber attack update after 'funds stolen' in co-ordinated security breach RBA's superannuation warning amid $50 billion ASX plunge: 'Chilling effect' 'They are very worried. One of the biggest things that scared them is how much it's going to cost them because everything's changing,' Raso said. 'From the introduction of the single-touch payroll, that's hurt employees and it has cost them a lot. Then you're looking at more regular reporting of GST, that's not going to be a one off. You've got payday super that's coming in. 'They are the lifeblood of the community. They're employing people all around the country.'The instant asset write-off scheme allows businesses to claim an immediate deduction for the cost of an asset, rather than depreciate them over time, in the year it is first used or installed ready for use. The boosted $20,000 threshold applies to small businesses with an annual turnover of $10 million. It applies on a per asset basis, so small businesses can instantly write-off multiple purchases. That means tradies could claim new tools, while cafes could claim things like kitchen equipment and coffee machines, and other businesses could claim computers and tablets. The threshold was previously set at $1,000, however, the government has boosted it to $20,000 over the last couple of years. Labor has promised to extend the $20,000 instant asset write-off for 12 months for assets that are first used or installed ready for use by June 30, 2026. The move comes after an extension was notably not included in this year's federal budget. Prime Minister Anthony Albanese defended the decision not to make the increase permanent and said it would encourage businesses to buy new tools and upgrade their equipment now. "That's the whole point, so that you create that economic activity and the multiplier that flows through immediately, rather than say, 'oh well don't worry, sometime in the future, forever, you can do this',' he told ABC Radio Sydney. "We want to encourage that economic activity now from small business and tradies." Opposition Leader Peter Dutton used his budget reply speech to pledge to extend the instant asset write-off to $30,000 and make it permanent. 'This will simplify depreciation for millions of small businesses by cutting red tape, boosting investment in productive assets, lowering business costs and prices,' Dutton said. CPA Australia has welcomed Labor's pledge to extend the $20,000 instant asset write-off by 12 months but has argued the measure needs to be made permanent to encourage investment. 'Long-term certainty is crucial for businesses, and the full potential of this policy to support smaller businesses will never be realised if it remains an annual measure,' CPA Australia business investment lead Gavan Ord said. 'In times of significant uncertainty, such as [the] US tariff announcement, businesses need the next government to adopt a long-term approach to providing incentives to the SME sector.' The Australian Chamber of Commerce and Industry is also calling for the measure to be permanent, instead of a year-by-year proposition. CEO Andrew McKallar said Labor's announcement was 'underwhelming', with last year's measure to extend the $20,000 for this financial year only just passing through parliament. 'Treating a measure which dictates how small business makes decisions to invest in capital as a year-to-year proposition just doesn't measure up,' he said. 'The benefits of the write-off have been demonstrated in recent years, but the farce of year-by-year chaotic renewals needs to be replaced by a system that builds certainty and confidence.'Sign in to access your portfolio
