A complete analysis of common mistakes in Australian tax return declaration: avoid these pitfalls and get your money back easily!

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July 1 to October 31 every year is the tax season in Australia. For many new immigrants, international students and workers, tax declaration and tax refund is an important and complicated process. In this process, many people make various mistakes due to ignorance of relevant regulations or negligence, resulting in tax refund delays, reductions, and even fines. Today, we will analyze in detail the common mistakes in Australian tax declaration and tax refund to help everyone avoid these pitfalls and successfully get back their own tax refund amount.

1. Failure to file tax returns on time

Many people don't rush to file their tax returns at the beginning of the tax season, thinking that it's still early, and end up missing the October 31 deadline. If you file your taxes through a tax agent, the deadline may be extended to May of the following year, but if you file your taxes yourself, you must complete it before October 31. Failure to submit your tax return on time may result in a penalty, the amount of which depends on the length of the delay, up to $1,110 for every 28 days.

2. Omitting income sources

In Australia, all income needs to be declared, including wages, investment income, rental income, overseas income, etc. Many people only declare the income from their main job and ignore other sources of income. For example, if you have a part-time job, stock investment or property rental, these incomes also need to be filled in the tax return. Omitting income will not only result in a reduction in the amount of tax refund, but may also be regarded as tax evasion by the Tax Office (ATO) and face serious legal consequences.

3. Misreporting work-related expenses

The declaration of work-related expenses is one of the most error-prone parts of tax returns. Many people try to claim ineligible expenses, such as transportation expenses and clothing expenses that are not related to work, in order to get more tax refunds. The ATO has strict regulations on the declaration of work-related expenses. Only those expenses that are directly related to work and have not been reimbursed by the employer can be claimed. If you are not sure whether an expense qualifies, it is best to consult a professional tax agent.

4. Failure to properly declare investment property-related expenses

For those who own investment properties, it is very important to correctly declare the expenses related to the property. Common mistakes include declaring the expenses of the owner-occupied house, not correctly allocating expenses (such as loan interest, repair costs, etc.), and not keeping relevant receipts and records. The ATO will carefully review the expense declaration of investment properties. If errors are found, not only will the overpaid tax be required to be refunded, but a penalty may also be imposed.

5. Failure to claim tax deductions

In contrast to misreporting expenses, some people fail to claim tax deductions they deserve because they don't understand the relevant policies. For example, many people don't know that they can claim work-related study expenses, home office expenses or charitable donations. The ATO provides a detailed list of tax deductions, and it is recommended that everyone read it carefully before filing taxes to ensure that they don't miss any deductions they deserve.

6. Failure to keep relevant records

The ATO requires taxpayers to keep all relevant records for at least five years after filing a tax return. These records include proof of income, expense receipts, bank statements, etc. If the ATO reviews your tax return and you are unable to provide relevant records, your tax refund may be cancelled or you may even face a fine. Therefore, it is important to keep all tax-related documents properly.

7. Failure to update personal information

If your personal information changes, such as moving, getting married, changing jobs, etc., be sure to update the ATO's records in a timely manner. Failure to update your personal information may result in you not receiving important tax notices and even affect the amount of your tax refund. In particular, bank account information may cause a delay in your tax refund if the ATO is unable to deposit the tax refund amount into the correct account.

8. Not using a tax agent

For those who have more complicated tax returns, using a tax agent is a wise choice. Tax agents can not only help you avoid common mistakes, but also help you get more tax deductions and refunds. ATO-approved tax agents usually have rich experience and expertise and can provide you with personalized tax advice.

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