‘Lazy tax’: The one thing separating a tax time loser from a tax time winner

Alright, you’re sitting down with a calculator, a box of receipts and records, and a cup of something rejuvenating or fortifying. It’s tax time.

But how do you make sure you come away with all the legitimate deductions you’re owed, and without the ATO breathing suspiciously down your neck.

Fortunately, the answer is simple. Unfortunately, there are no shortcuts.

Finance expert and author Adrian Raftery was upfront about the people who were the biggest losers come tax time.

“Those who are lazy, those who don’t keep receipts,” he said.

Extensive documentation of expenses is the key to making sure you’re getting your fair share of deductions.

So if it’s too late for you to start doing that for 2025-2026 – and it is – make sure you get a speedy start on that for the next financial year.

Raftery told nine.com.au the average claim for well-documented work expenses, including work-related car travel and home office use, could come to $2700.

It’s a lot to leave on the table.

For example, a work-from-home employee who doesn’t keep accurate and detailed records about their expenses can probably only claim the flat rate of 70 cents an hour.

“The actual costing method is invariably higher,” Raftery said, throwing out a ballpark figure of “a few hundred dollars extra”.

H&R Block Australia director of tax communications, Mark Chapman, was also adamant that shortcuts amounted to lost money.

“Employees who rely solely on pre-filled data are a big group – they often miss legitimate deductions,” he said.

“Leaving everything until the last minute is a major factor. It often results in missed deductions and errors.”

He urged people to not wait until July to review their records, and not to rely on “guesswork”.

“Gig economy workers and those with side hustles are also at risk, particularly if they don’t understand their obligations or fail to keep proper records,” he said.

“Investors, especially those dealing with shares or crypto, can also overpay tax due to poor tracking of costs and transactions.”

He advised investors and taxpayers who’d kicked off a new side hustle, complicating their tax situation, to seek advice or even engage a tax agent.

“Keep clear documentation, including receipts and logs where required,” he said.

“Finally, don’t assume the ATO has everything covered—pre-filled data is helpful, but it’s not the full picture.”

Raftery said those who received an income tax bill even after filing accurately might be apt to feel like a “loser”, but in the long run it wasn’t so.

“A tax bill of $3000 represents $10,000 of untaxed income,” he said.

“You may feel like a loser, but you’re a net winner.”

Of course, there’s another way to be a tax time “loser”, and that’s to assume you can slip one past the sharp eyes at the ATO.

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In the soon-to-be published 16th edition of Raftery’s book 101 Ways To Save Money on Your Tax Legally, the author explains this can be a particular pitfall for occupations on the ATO’s annual “hit list”.

The hit list changes around, but it is designed to put particular industries in the spotlight, especially ones that tend toward high expense claims, or where many people are making a claim for the first time.

The ATO informs members of these occupations that they are under the microscope as a way to encourage particularly diligent filing.

Raftery says there is no need to not claim legitimate expenses, but to ensure that if the ATO does contact you about an issue, to be upfront if there was a mistake, and to have all your documents in order.

Fines for intentional deception can be severe – up to 75 per cent of a tax shortfall, or a flat $19,800 fine if no shortfall exists.

And there’s a final set of tax-time losers as well, through no fault of their own. Scam artists often target people by using official-seeming emails.

If the ATO contacts you, it will be through the post, on the phone, or via your MyGov account.

Raftery said ATO figures showed tax scam emails in 2021 alone stole $800,000 out of Australian pockets.