The Most Common Mistakes People Make Lodging Their Tax Returns

When it comes to tax time, many people are tempted to fill out their own lodgement rather than seek a professional tax return accountant’s help. However, mistakes can happen easily, and your tax return errors could prove to be costly down the track. Each year, the Thornton & Associates team witnesses first-hand the expensive mistakes people make doing their own taxes, which is why we always recommend booking an appointment with a tax agent in Sydney after July 1st. Here are a few of the more common mistakes we see year in, year out.

The Most Common Misconceptions about Tax Time

The Thornton & Associates team has decided to address some of these myths and clear the air a bit.

Myth: You can claim your whole phone bill if you use your phone and internet for work.

To claim anything back for your phone and internet bill, you need to work out how often you’re using them for work and figure out what percentage of the bill you can claim. A logbook is a great way of keeping track of your usage.

Myth: You can claim $150 for uniform costs without a receipt, so you should do it even if you don’t wear a uniform.

You can claim back $150 without receipts for an eligible uniform, which is one that is mandatory with a company logo or one required to perform your job, such as a chef’s uniform. Unfortunately, you can’t claim back the Zara top, even if you wear it to work.

Myth: You can claim back all household costs if you work from home.

Much like your phone and internet usage, you can only claim what you’re using during work hours each day, and your work hours need to be regular. For example, if you usually work between 9-5, you can only claim electricity back for those hours, even if you decide to work later each day. You can make claims based on actual costs which you’ll need to prove, or you can claim a set rate per hour to cover air-conditioning, electricity, furniture, and carpets. The current set rate is around 52 cents an hour.

Myth: If you study a course to help you get a promotion, you can claim the costs.

Not quite. Unless the course is directly related to your current income-earning activity, you can’t claim it back. Studying for career progression isn’t tax-deductible.

Myth: Travel to and from work can be claimed on my return.

Unless you’re transporting essential goods to and from work at the request of your employer, you can’t claim travel on tax. Additionally, if you’re working from home due to COVID and you travel to the office during your work hours, you won’t be able to claim travel expenses. Although you may be working from home, your house is still seen as a residence and not a place of business.

Myth: If I lodge early, I’ll get my return early.

It doesn’t work like that, unfortunately. When you lodge early, you run the risk that your employer hasn’t uploaded all your necessary documents, which can slow down your return process’s speed.

The 4 Biggest Mistakes People Make On Their Returns

According to the Australian Taxation Office, here are the five most common mistakes to avoid come tax time.

• Claiming deductions on personal expenses. Unless you’ve spent your own money on something directly related to your income-earning job, you can’t claim it in your tax return. You cannot claim travel from home to work, everyday clothes, or personal phone calls and internet. Additionally, you can’t claim things you didn’t pay for at all, so don’t make things up on your return.

• Leaving out an income stream. If you exchange goods or services for money, that is considered work and you are obliged to pay taxes on that work. You also need to declare cash-in-hand work. If you’re not sure how to do so, ask your tax accountant in Sydney for advice.

• Forgetting to keep receipts. If you plan to claim expenses, especially high-value expenses, hold onto your receipts to prove the purchase. At Thornton & Associates, we use digital accounting software like Xero to log all expenses, so it’s far easier for us to lodge an accurate tax return for you and your business.

• Claiming personal expenses for rental properties. We often find individuals attempting to claim interest on loans used to purchase vehicles by pretending they used the loan to pay for a rental property. This could be a costly mistake to make, so be careful when doing your own tax return in Sydney.

Why Should You Hire A Tax Agent In Sydney?

Hiring a professional tax accountant comes with a long list of benefits for you long-term:

• We cover all tax claims. Whether you’re lodging for an individual, a sole trader, a business, or a company, Thornton & Associates have a tax return accountant that can take care of your lodgements.

• No surprises in the future. When you hire a Thornton & Associates tax accountant, you can rest assured that we’ll file your taxes correctly so you’ll have no tax debts or fines in the future. We’ll also make sure you’re aware of any existing debt, and we’ll help you strategise to pay it off quickly.

• Maximise your returns and deductions. No one knows how to get you the best value for money quick like Thornton & Associates. We’ll claim everything you’re eligible for and try to get the very best outcome for you.

• Save yourself time. Rather than pouring over your accounts, forms, and documentation trying to lodge your return, leave it in the capable hands of a tax agent in Sydney. The Thornton & Associates team will handle your return for you so you can go back to focusing on the things you enjoy.

• Get useful business insights. The Thornton & Associates team are more than tax accountants; we can advise you to help your business grow and flourish. If we see anything while lodging your return that we think could be useful to your financial success, we’ll let you know.

For A Tax Return Accountant You Can Trust, Call Thornton & Associates

At Thornton & Associates, we do things a little differently. Even though the world is changing, evolving, and becoming more digitised, we noticed that the accounting industry lagged. We decided to bring innovation to accounting and become one of the first completely paperless practices in Sydney. We’re committed to using cutting edge technology and the latest accountancy software to provide our clients with practical, tailored accounting and business solutions. No matter what industry you’re in, Thornton & Associates can help you with all your finance management needs. When you need a tax return accountant in Sydney, the team at Thornton & Associates can help. Give us a call or email us today to find out how we can help your business grow.

Our Story

Thornton & Associates was established to address the severely under serviced needs of growing and mid-sized enterprises in Australia. These businesses were in need of two tiers of help, that typically only large and multinational corporates were able to avail themselves of: firstly, the automation of basic day-to-day accounting operations; and secondly the provision of timely business consulting and tax advisory that is enabled when the books are able to take care of themselves.

As this two-tiered service strategy permeated the market, clients of Thornton & Associates realised that the considerable time and effort spent keeping ahead of accounting work that our firm could automate, is overwhelmingly better spent leading and strategising the operations of their respective businesses — and resulted in enduring business success.

Certified Xero Accountants

Xero is the most powerful growing and mid-sized accounting platform in the world, and is what enables Thornton & Associates accountants and business consultants to excel in servicing its clientele. Whether your business is using Xero or using another accounting product, Thornton & Associates can assist you in transitioning to Xero or empower you to use Xero to the fullest extent available by its constantly evolving and newer features.