Lodging Your Own Tax Return in Australia: What to Claim and Where People Trip Up

For a salaried employee with one job and a single bank account, preparing a tax return is an evening’s work that most people can manage themselves. For a sole trader with a vehicle, a home office and a quarterly business activity statement, it is a different task altogether. Most people do not choose wrong between those two paths. They simply miss the moment when their affairs stop being simple.

The lodgement year and the deadline

The Australian tax year runs from 1 July to 30 June. A return for that period can be lodged once the year ends, and the Australian Taxation Office (ATO) pre-fills much of the individual return from information already reported by employers, banks and other payers. For most people, lodging online is mostly checking the pre-filled figures, adding the deductions they are entitled to and submitting.

A self-prepared return is generally due by 31 October after the end of the tax year, although the ATO can allow extensions in particular circumstances. Returns lodged through a registered tax agent run on a different lodgement program with later dates, which is one reason taxpayers with more complex affairs tend to use one.

What counts as a deduction

The central test is straightforward. An expense is deductible when you paid for it yourself, it is directly related to earning your income and you can produce a record for it. Private expenses fail that test, and so do work expenses your employer has already reimbursed.

Claims that usually survive a review include work-related equipment, professional memberships and self-education that connects to your current job. Claims that attract attention are the ones with no supporting record, or the ones that look personal, such as everyday clothing worn to a workplace with a uniform policy.

Working from home

Two broad methods are accepted for claiming home-office expenses. One applies a fixed rate per hour worked from home to cover running costs such as electricity and internet. The other claims the actual expenses, apportioned by the share of the home used for work. Whichever method is used, the ATO expects a record of the hours worked, such as a diary kept around the time, rather than a figure reconstructed at the end of the year. The rates change periodically, so the current ATO guidance should be checked before lodging.

Vehicle claims

A vehicle used for work can be claimed under a cents-per-kilometre method or a logbook method. The first applies a set rate per business kilometre, capped at a maximum number of business kilometres each year. The second requires a logbook kept over a continuous period to establish the business-use percentage, plus records of the vehicle’s running costs. Travel between home and a regular workplace is generally private and not deductible, except where you carry bulky tools or attend different sites as part of the work.

Record-keeping that survives a review

The ATO can examine a return years after it is lodged, and the burden sits with the taxpayer to show a claim is correct. Receipts, invoices, bank statements and a logbook or diary are the records that matter. Most tax records should be kept for five years from the date the return is lodged. A taxpayer who cannot produce a record for a claim can expect it to be disallowed, with interest and possibly penalties on top.

Where people trip up

The common problems are not exotic. They include claiming private costs as work expenses, treating a deduction as a dollar-for-dollar refund when it only reduces taxable income, mixing the two home-office methods in the same year, and overlooking assessable income such as bank interest, dividends or a capital gain on an investment. Each of these is easier to prevent than to fix after the fact.

A separate decision sits one level above the return: the choice of business structure. Differences in liability and administration usually matter more than the tax saving, a comparison worth reading before anyone decides to incorporate for tax reasons alone.

When doing it yourself stops being worth it

Certain signals should point a taxpayer towards a registered tax agent: running a business with employees, owning a rental property, earning overseas income, holding shares that pay franked dividends, or receiving a notice from the ATO about a previous return. There is also a legal point to weigh. Under the rules administered by the Tax Practitioners Board, only a registered tax agent may charge a fee for preparing a return or giving tax advice. When the return involves those complications, the fee is usually small next to the cost of getting the position wrong, and a good agent keeps the year’s affairs in order rather than simply filling in the form. That wider job is covered in keeping your tax matters clear, simple and under control.

The return that survives the review

Self-preparing a simple return is a reasonable choice, and for many people it is the right one. The line is crossed when income and deductions stop being straightforward. At that point the question is no longer whether you can lodge the form, but whether you can see what you are missing. That gap, not the paperwork, is where the value sits.