It’s almost the end of the financial year and that means it’s time to get your tax affairs in order. The Australian Taxation Office is encouraging people with relatively simple tax returns to complete them online but many people are still not claiming all they are entitled to, usually to their detriment. Here are some of the more common mistakes people make when completing their own tax return.
- Travelling to and from work
Generally speaking, your daily commute is not tax deductible. However, if you have to carry bulky items such as tools related to your job to and from work, then you may be able to make a claim. So, a tradesperson who has to bring a toolbox to work may be eligible to make a claim for travelling to and from work, whereas a chef carrying a set of knives would not.
- Work clothing
The tax office generally considers work clothing to be a uniform with the company logo featured on it. Ordinary clothes can’t be claimed; for instance, if you work for a clothing retailer and have to wear the clothes you are selling, this would not be considered eligible. It’s a similar situation with shoes; unless an employer has mandated a specific type of shoe, such as steel-capped safety boots for construction workers, they can’t be claimed. On the other hand, a handbag or briefcase that is used for work can be claimed as a tax deduction.
Self-education can be a bit of a grey area. Any courses or study you undertake must be related to your current job to be deemed eligible for a claim. If you’re studying to be a barista while working as a truck driver, you won’t be able to claim your study expenses.
- Travel expenses
If you have to travel for work, you may be able to claim expenses such as flights, accommodation and meals but only as they relate to your work and not if your employer has already reimbursed you for the costs.
- Charitable donations
Donations to charity are one of the most popular tax deductions but not everything can be claimed. For instance, if you are getting something in return for your donation, whether it’s a pen or a raffle ticket, then this is not eligible. Some charities will make it easier by putting on the receipt how much is a donation and what proportion is covering the costs.
- Working from home
If you get to work from home, you may be able to make a claim but generally you will need to provide some form of proof of what you are doing and for how long.
Completing your tax returns yourself may seem like the most cost-effective solution but you could be missing out on all of the deductions you may be entitled to. These are just some of the areas where you can be tripped up so seeking the advice of a professional can actually save you money by finding every single deduction you are legally entitled to.