Avoid costly errors this tax year! Discover the five most common tax mistakes Aussies make in 2025 and learn practical tips for lodging a flawless return—no jargon, no stress.
5 Common Tax Mistakes to Avoid This Year: Comprehensive Guide for Everyday Australians
When tax season hits, most Aussies hope for a smooth return and a juicy refund. But even smart, careful people can fall into common traps that the ATO catches every year. Let’s make sure that’s not you! Whether you’re a seasoned worker, a gig economy side-hustler, or lodging your first return, here are the absolute must-avoid mistakes—plus real-life examples, tables, and a few practical pointers to get your return right.
1. Overstating Work-Related Deductions
One of the most frequent mistakes is claiming expenses that aren’t actually work-related, or stretching what counts as “necessary for your job.” It’s tempting to claim that new phone, kitchen gadget, or even a part of your wardrobe, but unless you use them exclusively for your work and can back it up with proof, the ATO will see through it.
Everyday Example:
A truck driver tries to claim swimwear as a deduction because of hot travel stops—it gets knocked back. A mechanic attempts to claim for a household air fryer, TV, and games console as “work-related”—the ATO says no.
Quick Tip:
For any work expense you claim, make sure there’s a real connection to how you earn your income, keep proper receipts, and be prepared for the ATO to question you about it.
2. Forgetting to Include All Income
Every dollar counts—side hustles, bank interest, freelancing, gig jobs, even crypto income or rental income must be included. Leaving out income, whether by accident or on purpose, is one of the quickest ways to get flagged for an audit or delay your refund.
Everyday Example:
Georgia, an IT consultant, forgot to report the couple hundred dollars she made from freelance gigs during the year. Months later, she received a letter from the ATO asking her to amend her return and pay back taxes plus interest.
Quick Tip:
Crosscheck your income by printing a list from your bank account, payroll summaries, and all gig platforms or investment accounts before starting your return.
3. Claiming Deductions Without Proper Evidence
It’s a common blunder—guessing deduction amounts, rounding up expenses, or losing the paperwork. If you lodge a claim but can’t produce an invoice, receipt, or credible record, you’ll need to repay the deduction (sometimes with a hefty penalty too).
Everyday Example:
Mike puts down $1,000 for “office supplies” without receipts, only to be asked later for proof. The ATO denies his claim, and Mike has to pay additional tax and a late fee.
Quick Tip:
Keep a digital or physical record of every deductible item. Tools like the ATO myDeductions app help save and store receipt images year-round—much easier than scrambling at tax time.
4. Relying Only on ATO Pre-Filled Data
It’s convenient to use data pre-filled into your online tax form, but it’s not always complete or perfectly accurate. Banks, employers, and investment companies sometimes report late, and missing income can land you in trouble later.
Everyday Example:
Sarah submitted her return right after pre-fill opened, but her part-time job’s final payment hadn’t been reported yet. Weeks later, she received an “adjustment” letter with a tax bill.
Quick Tip:
Use your own payslips, group certificates, interest statements, and platform summaries. Only lodge after checking that everything matches your records.
5. Missing or Incorrect Personal Information
A surprisingly large share of refunds is delayed because of spelling mistakes, wrong addresses, outdated bank details, or missing identification. A misspelled name or a mismatched bank account can leave your return lost in the system for weeks.
Everyday Example:
Emilia moved houses mid-year but forgot to update her address with the ATO. Her refund was delayed while officials tried to confirm her identity.
Quick Tip:
Before submitting, double-check every personal detail, including name, address, date of birth, Tax File Number (TFN), and bank info. Notify the ATO about any changes as soon as possible.
Table: Five Tax Mistakes and How to Avoid Them
| Mistake | Example | How to Avoid |
|---|---|---|
| Overstating deductions | Claiming personal goods as work expenses | Only claim what you can prove |
| Forgetting income | Not declaring gig or bank interest income | Crosscheck all sources |
| No deduction evidence | Rounding up or guessing claim amounts | Keep digital receipts |
| Relying on pre-fill alone | Lodging before all data is in | Compare with your records |
| Incorrect personal information | Wrong name, address or bank details | Review before submitting |
Frequently Asked Questions
Q: Can I claim my commute to work as a deduction?
No—travel to and from work is considered personal by the ATO and can’t be claimed as a deduction.
Q: Are credit card statements enough as evidence for deductions?
Generally, no. You need proper receipts or invoices that show what was purchased and how it relates to your work.
Q: I made a mistake—can I fix it?
Yes! You can amend your return online or with a tax agent. It’s always better to correct mistakes as soon as you notice them rather than wait for an ATO letter.
Q: What if I forget to declare a small amount of income?
It still needs to be included. The ATO data-matches with banks, employers, and platforms, and even small amounts can be flagged.
Q: Should I use a tax agent?
If your situation is tricky or you’re unsure, tax agents save time and stress. The fee is tax-deductible, too.
Final Word: Everyday Aussie Story
Think of Katie, a single mum from Perth. She used to rush her tax return every July, keen on a speedy refund. After being caught out twice with missing gig income and loose deduction claims, she slowed down, double-checked her records, and started using the ATO app for receipts. “It only took an extra hour, but I saved hundreds—and didn’t have to deal with the ATO again next year!”
Call to Action
Ready to breeze through tax time this year? Avoid these five mistakes and enjoy a faster, simpler refund. If you need extra help or personal advice, reach out to a registered tax agent or check the ATO’s latest guidance—make 2025 the year you master your money and stay ahead of the tax curve!
