H&R Block reveals the top tax mistakes

H&R Block listed some of the most common tax mistakes to watch out for so you can avoid getting into any kind of tax trouble this year.

According to H&R, under the current self-assessment system, if taxpayers don’t declare their income or claim deductions incorrectly, they could incur huge penalties from the Australian Tax Office.

Mark Chapman, Director of Tax Communications for Australia’s largest firm of tax accountants H&R Block said, “This means in effect taxpayers can claim ‘anything within reason’ but if the claims are found to be incorrect, the taxpayer is required to repay the tax avoided, plus pay interest on incorrect claims at around 9.5% per cent per annum.

“If the ATO office believes that the taxpayer has acted carelessly, a penalty between 25% and 95% of the tax avoided may also be charged”, he added.

Here are some of the common tax mistakes:

Not declaring all your income

These days, the tax office receives most of your income information electronically from third parties so if this turns out to be different from what you declared in tax returns, the tax office will issue an income discrepancy notice. If it is found that you have under declared your income, the tax office will issue an amended assessment and general interest charge of about 9.5% will apply, together with a 25% culpability penalty. Do it again and the penalty can add up to 50% of the tax avoided!

Personal services income

In the tax law, personal services income is defined as income, which is mainly a reward for your personal efforts, skills and exertion. Alienation of such income occurs when an individual tries to reduce or defer their income tax and other liabilities by diverting their personal services income through companies, partnerships or trusts that are not conducting personal services businesses. Remember that only an individual can have personal services income.

Home office

If you are using your home as a home office to work at home after hours, you are not entitled to claim a percentage of rent or the interest on a mortgage. You can only claim a percentage of the actual costs incurred, which includes electricity and heating costs, depreciation of office furniture and equipment and a percentage of telephone and Internet use based on a log book kept for a four-week period.

Self education

It’s important to make sure that the education undertaken has the necessary connection with the income you are currently earning, or else the deduction is not permissible.

Not claiming senior Australian Tax Offset

This rebate has risen in the past few years and means that many taxpayers, who are self-funded retirees, don’t need to pay tax until their income gets to the same taxable levels as pensioners.


Savings account comparisons on Mozo - last updated 14 May 2022

Search promoted savings accounts below or do a full Mozo database search. Advertiser disclosure
  • Mozo Expert Choice Badge
    Life - 18-29 years old
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    2.00% p.a. (for $0 to $30,000)
    0.15% p.a.(for $0 and over)
    Yes up to $250,000

    Make 5 card purchases/month with a Westpac Choice account and min 1 deposit and higher balance than at the beginning of the month in Life savings account.

    Earn up to a generous 2.00% p.a. variable interest on your savings when you spend and save with Westpac. For individuals aged 18 to 29 on Westpac Life account balances up to $30k.

    Details
  • Mozo Expert Choice Badge
    Boost Saver with Go Account
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.00% p.a. (for $0 to $250,000)
    0.05% p.a.(for $0 and over)
    Yes up to $250,000

    Bonus rate of 1.00%. Deposit $2,000 each month and make 5 eligible payments from your Go Account. If you are between 18 and 25 deposit $1,000.

    Enjoy a high interest savings account bundled with an everyday spending account. No monthly fees. And new customers can get a welcome bonus of 20,000 bonus Virgin Money Points (ends 31/05/22. Offer criteria & T&Cs apply).

    Details
  • Mozo Expert Choice Badge
    Savings Account
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.35% p.a. (for $0 to $250,000)
    0.95% p.a.(for $0 to $250,000)
    Yes up to $250,000

    Bonus variable rate is available for the first four months.

    Introductory variable rate of 1.35% for first 4 months (on deposits up to $250,000). Ongoing variable rate from 0.95%. No account keeping fees to pay. Multiple 2022 Mozo Experts Choice Award winner.

    Details
  • Mozo Expert Choice Badge
    AMP Saver Account
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.35% p.a. (for $0 to $250,000)
    0.10% p.a.(for $0 to $5,000,000)
    Yes up to $250,000

    Minimum deposit of at least $250 in the previous month.

    An ongoing total variable bonus rate of up to 1.35% per annum will apply each month if you deposit $250 in the previous month. Available only on balances up to $250,000. AMP Bank, winner of the Mozo Experts Choice Awards 2021 in the Savings category.^

    Details
  • Mozo Expert Choice Badge
    Boost Saver with Go Account
    Maximum rate
    standard interest rate
    Govt Deposit Guarantee
    1.35% p.a. (for $0 to $250,000)
    0.05% p.a.(for $0 and over)
    Yes up to $250,000

    Bonus rate of 1.35%. Deposit $2,000 each month, make 5 eligible payments from your Go Account and enable the Lock Saver feature. If you are between 18 and 25 deposit $1,000. 32 days notice for withdrawal and T&C's apply.

    Enjoy a high interest savings account bundled with an everyday spending account. No monthly fees. And new customers can get a welcome bonus of 20,000 bonus Virgin Money Points (ends 10/4/22. Offer criteria & T&Cs apply).

    Details

^See information about the Mozo Experts Choice Savings Account Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.