Australians are being urged to review their tax returns carefully this year, as new research shows that many are missing out on hundreds of dollars in unclaimed deductions. With the end of the financial year approaching, early filing could lead to avoidable mistakes and missed entitlements.
According to tax experts, self-filers using the Australian Taxation Office’s (ATO) myTax platform are particularly vulnerable to these errors. The average shortfall from overlooked deductions has been estimated at $525.50, raising concerns for households already struggling with tightened budgets.
Self-Lodged Returns Miss Key Deductions
New findings from H&R Block, a leading tax services company, reveal that 66% of Australians who lodge their own tax returns fail to claim all the deductions available to them. These missed opportunities primarily affect those using the ATO’s myTax portal, where guidance is limited compared to services offered by tax agents.
Mark Chapman, Director of Tax Communications at H&R Block, explained the scope of the issue. “In a year when every dollar counts, that’s money Australians can’t afford to leave behind,” he said. The research also highlighted that one in three individuals only realized they had missed deductions after submitting their return, making it too late to recover those amounts.
Common Claims Include Car and Clothing Expenses
The most frequently claimed work-related expenses include car costs and clothing. According to ATO data, 3.6 million people lodged car-related claims totaling $10.3 billion for the 2023–24 financial year. Clothing claims were even more widespread, with 6.5 million taxpayers reporting $2.2 billion in expenses.
Despite their prevalence, these categories are also among the most misunderstood. Taxpayers often assume certain items are deductible without meeting the specific criteria outlined by the ATO. In previous years, the agency has issued clarifications to curb invalid claims, especially for work uniforms and vehicle use.
Timing Errors Could Undermine Tax Returns
The ATO has advised Australians to avoid lodging their returns immediately after the financial year ends on July 1. Filing too early may result in incomplete data, as pre-filled information from employers, banks, and government agencies may not yet be available.
By waiting a few weeks, taxpayers can benefit from automatic updates to their returns, reducing the likelihood of omissions or inaccuracies. In 2023, around 3 million individuals had already filed by July 23, and that figure surged to 5.8 million by August 20, reflecting a national tendency toward early submission.
Complex Tax Situations Require Increased Diligence
As work arrangements become more flexible and diversified, taxpayers face more complex filing scenarios. Side businesses, investments in shares or property, and working from home all introduce variables that can complicate the deduction process.
“The ATO doesn’t tell you what you’re entitled to claim — that’s up to you,” Chapman noted. He emphasized the need for taxpayers to educate themselves on eligibility criteria, especially in cases where standard employment conditions have changed.
Professional Advice May Improve Outcomes
Ben Nash, financial adviser and contributor to Yahoo Finance, has pointed out that many Australians overlook lesser-known deductions, such as depreciation on home office equipment or investment-related fees. For those unsure of their entitlements, consulting a tax professional may lead to significantly higher refunds and greater compliance.
With tax season fast approaching, Australians are being encouraged to prepare carefully, review all documentation, and consider expert assistance to ensure they do not leave money unclaimed.
