ATO’s assistant commissioner Karen Foat (pictured) has revealed the five simple mistakes Australians are making when lodging their tax returns
Australians have been making five simple mistakes while lodging their tax returns which is slowing down the returns process.
The beginning of the new financial year on July 1 saw the Australian Taxation Office’s website crash as people rushed to file their returns.
Within two days, the ATO received a whopping 230,000 tax return applications, however many of them were riddled with mistakes.
ATO’s assistant commissioner Karen Foat said it was simple errors which slowed down the returns process.
‘A lot of people who have rushed in to lodge early have left out income out such as employment income, information from banks, bank interest, private health insurance and JobKeeper as an employee and Jobseeker,’ she told Herald Sun.
Australians are making five simple mistakes while lodging their tax returns which is slowing down the return process (stock)
‘That information is generally ready by the end of July and we tell people who are lodging before then to make sure that information is in there.’
She said Australians were also not updating their bank account details and were incorrectly using the 80 cents shortcut for employees working from home.
‘This rate is all inclusive so if you are claiming that, you cannot claim any other working from home expenses,’ Ms Foat said.
It comes as the ATO extended the 80 cents shortcut for each hour worked from home from between March 1 to June 30 up until September.
This option can be used by multiple people working in the same house.
Workers can also opt for the other two calculating methods if they think this will earn them a bigger return, as long as there is proof of purchases.
The top five tax lodgement mistakes:
- Leaving out income for 2019/20 financial year
- Not updating bank details on ATO website
- Incorrectly using the 80 cents per hour shortcut rule for working from home.
- Copying last year’s return despite circumstances changing.
- Claiming tea or coffee which they say was 100 per cent used for work when they were not.
Source: Australian Tax Office
Under the actual expenses method, workers can claim costs which occurred due to working from home such as electricity and internet bills.
With the fixed rate method, workers claim a deduction of 52 cents for each hour worked from home for additional running expenses such as a decline in value of furniture, electricity, gas, heating, cooling, and repairs.
Ms Foat also noted that Australians were copying previous years’ returns when they shouldn’t due to changed circumstances.
Some people were also claiming coffee or tea which they say was 100 per cent used for work when they were not.
H & R Block’s director of communications Mark Chapman requested that Australians wait to lodge their tax until they have all the necessary information ready.
It comes after the ATO website crashed with cash-strapped Australians rushing to take out another $10,000 from their superannuation.
The first $10,000 could be withdrawn during the 2019-20 financial year, and the same amount again during the 2020-21 financial year.
More than 2.2 million approved applications have already withdrawn a combined total of $18.5 billion.
Applications for accessing super early in the 2020-21 financial year are available via the MyGov website and close on September 24.
H & R Block’s director of communications Mark Chapman requested that Australians wait to lodge their tax until they have all the necessary information ready (stock)
Customers signing in to lodge their tax or apply to access their super fund were met with a error message (pictured) after the site crashed due to high traffic
Australians can only access their super if they’re unemployed, are eligible to receive a job seeker payment, have been made redundant since January 1 or had their work hours reduced by at least 20 per cent.
However, experts have urged young Australians to consider the consequences of pulling funds early after billions of dollars were wiped from accounts in recent months.
A 35-year-old who withdraws $10,000 now will see a $19,411 reduction in their super when they retire at 67, according to the Money Smart calculator.
What you can and can’t claim on tax while working from home
Expenses you can claim
If you work from home, you will be able to claim a deduction for the additional expenses you incur. These include:
- electricity expenses associated with heating, cooling and lighting
- the area from which you are working and running
- items you are using for work
- cleaning costs for a dedicated work area
- phone and internet expenses
- computer consumables (for example, printer paper and ink) and stationery
- home office equipment, including computers, printers, phones, furniture and furnishings – you can claim either the full cost of items up to $300 decline in value for items over $300.
Expenses you can’t claim
- If you are working from home, you can’t claim:
- the cost of coffee, tea, milk and other general household items your employer may otherwise have provided for you at work
- costs related to children and their education, including setting them up for online learning, teaching them at home or buying equipment such as iPads and desks
- items that you’re reimbursed for, paid directly by your employer or the decline in value of items provided by your employer – for example, a laptop or a phone
- time spent not working, such as time spent home schooling your children or your lunch break.
Employees generally can’t claim occupancy expenses such as rent, mortgage interest, water and rates.
Source: Australian Tax Office