Tax time doesn’t have to be stressful, yet every year, many taxpayers make avoidable mistakes that lead to delays, ATO scrutiny, or missed deductions. Whether you’re an individual taxpayer or running a business, avoiding these common tax mistakes can save you time, money, and hassle.
1. Failing to Declare All Income
One of the most common errors is underreporting income. With the ATO’s increased data-matching capabilities, it’s easier than ever for them to detect undeclared income, whether from wages, interest, dividends, or business activities.
Tip:
Cross-check all income sources, including:
- Bank interest
- Shares/dividends
- Government payments
- Freelance or ABN work
- Cryptocurrency transactions
2. Mixing Business and Personal Expenses
This is particularly common for sole traders and small business owners. Claiming personal expenses as business-related can trigger an audit and lead to penalties.
Tip:
Keep separate bank accounts and credit cards for business and personal use. Maintain detailed records and only claim expenses directly related to your business.
3. Incorrect or Missing Work-Related Deductions
Overclaiming or not understanding what’s actually deductible is a red flag. Conversely, many miss out on legitimate deductions like home office expenses or vehicle use.
Tip:
Understand the ATO’s rules for:
- Travel and motor vehicle deductions
- Uniforms and protective clothing
- Home office claims (especially post-COVID)
Always keep receipts and documentation to substantiate claims.
4. Forgetting to Lodge or Pay on Time
Missing BAS, income tax returns, or superannuation deadlines can lead to interest charges and penalties.
Tip:
Use a calendar or automated reminders to track key lodgement dates. Engage a tax agent to manage lodgement schedules and help avoid costly oversights.
5. Not Reviewing Reports Before Lodging
Whether it’s your accountant, bookkeeper, or yourself preparing the return, always double-check reports before they’re lodged.
Tip:
Look for:
- Spelling errors in business names
- Incorrect ABNs
- Mismatches between actual bank activity and Xero or MYOB records
6. Neglecting Superannuation Obligations
Late super payments are not tax deductible and may attract the Superannuation Guarantee Charge (SGC), which includes interest and admin penalties.
Tip:
Super is due quarterly—mark your calendar and ensure payments are processed ahead of time to allow for clearing delays.
7. DIY Lodgement Without Proper Knowledge
While self-lodging through myGov is an option, many taxpayers miss out on entitlements or make errors due to limited understanding of the tax system.
Tip:
Consider working with a registered tax agent, especially if your financial affairs are complex or if you’re running a business. Professional guidance can often pay for itself.
Final Thoughts
Tax mistakes can be costly, but with good record-keeping, timely lodgements, and professional advice, you can avoid the most common traps. Whether you’re an individual or business owner, staying informed and organised is the key to a smooth tax season.
Need help getting your records in order or preparing for EOFY? Contact our team today, we’re here to make tax time stress-free.