Yes, it’s that time of year again!
Yes, it’s that time of year again!
Having to do your tax return each year is unavoidable for most of us, so here are some of the basics, and also a few changes to know about when you’re doing your 2025/26 return.
Here are some general warnings from the Australian Tax Office:
SLOW DOWN!
The ATO is warning against early lodgement and is reminding taxpayers to slow down at the start of tax time, as this can mean delays and amendments – for 2024/25 there were over 595,000 tax returns adjusted
COMMON MISTAKES
1. Rushing often means leaving out income from side hustles, investment properties, interest, dividends, or gig-economy apps.
What to do: Always wait until your employer's payroll data is marked as "tax ready", and all external data is pre-filled in your ATO Online Services account. Declare profit from side hustles like high-volume online sales – digital platforms report these to the ATO. NB: Hobbies and ad-hoc sales of items are generally exempt
2. Claiming Personal Expenses as Work-Related. The ATO is rejecting "unusual" and entirely private claims being disguised as work expenses, for example, claiming baby items (e.g., winter clothes), personal gifts, and food delivery for yourself.
What to do: Expenses must have a direct connection to your ability to earn an income, and you cannot deduct private living or lifestyle costs.
3. Inflating or "Double-Dipping" Car Expenses
You can’t claim home-to-work travel as a private expense or habitually claim the maximum allowed limits without proof.
What to do: Ensure you only claim business-related travel and use the ATO Vehicle Logbook requirements to calculate your deductions. Use the MyDeductions App – it’s great at tax-time!
4. Incorrect Working From Home (WFH) Deductions
The ATO's data matching (probably the best in the world) and (lately) their AI, actively scans for overstated or undocumented WFH claims.
What to do: To use the current WFH fixed-rate method, you must be able to back it up with a written record of your actual work-from-home hours (such as diary entries or timesheets).
5. Dodgy deductions for amounts less than $300 in 2025/26 return
You can’t claim work deductions without a record of work-related expenses – this doesn’t need to be a receipt, but needs to be itemised.
However, for the 2026/27 tax year, there’s a much larger automatic deduction of $1000 available, without receipts.
What to do: keep a record of all work-related expenses, and to avoid missing out at 2026/27 tax time, keep receipts!
6. How to protect yourself
Check the Progress of your return – you can view the status of your lodged return by logging into your ATO Online Services via your MyGov account .
NEVER click links in texts or emails claiming to be from the ATO or a myGov. Services Australia link!!
Keep Good Records: Make sure you have your receipts, invoices, or logbooks ready to substantiate every claim you make.
Question: How do you plan to use your tax return to keep your finances healthy?
Contact us for a quick chat: https://www.vivafp.com.au/contact
