Sorting fact from fiction at tax time

As tax time approaches, it’s common to hear advice about what you can claim or how to lodge your return. Some tips are useful, but others don’t apply to everyone.

With so much information available online and shared between people, it can be hard to separate fact from fiction. 

For older Australians, tax affairs may involve income from savings, investments, or casual work, making it even more important to check details before lodging. A little time spent verifying information can help you avoid unnecessary stress. 

Check before you act 

Before relying on tax advice you’ve found online or heard from someone else, it helps to pause and consider: 

• Source: Does the information come from the ATO, a registered tax professional, or another trusted organisation? 

• Timing: Does it relate to the current income year? Tax rules and thresholds can change. 

• Context: Does it apply to your circumstances, or is it based on someone else’s situation? 

Common tax time errors to watch for 

Incorrect or incomplete information often contributes to common tax time errors, including: 

• Forgetting to declare income, such as interest from bank accounts, dividends from shares, rental income, or other investment returns. 

• Not checking pre‑filled information to make sure all income has been included. 

• Over-claiming deductions, including work-related expenses where only part of the cost relates to income-earning activities. 

• Claiming deductions without records, such as receipts or other documents that show the expense relates to earning your income. 

• Incorrect Medicare Levy Surcharge reporting, for example misunderstanding income thresholds or private hospital cover requirements. 

These errors are often caused by assumptions or outdated advice and can lead to delays or amendments after you lodge. 

Rental property deductions 

There’s a lot to navigate when it comes to owning a rental property, like understanding the difference between a “repair” and “improvement” and when you can claim them.  

To put it simply, if you: 

• Fix wear and tear or damage to your property that occurred while renting it out, it’s likely a repair. Repairs can generally be claimed as a deduction in the year they occur (keep your records!)  

• Renovate or replace an entire structure, it’s an improvement. These are capital works and can be claimed over time (generally 40 years). 

• Add or replace something that’s not part of the structure (for example, a new appliance or window covering), it's likely to be a depreciating asset. These are claimed over the asset’s effective life.

Claiming donations  

Not all donations are tax deductible. You can only claim donations to organisations with a deductible gift recipient (DGR) status of “endorsed” or “listed”.  

Before claiming a donation, keep these points in mind: 

• Always check the ABN Lookup tool to check the organisation’s DGR status before claiming.

• Not all crowdfunding campaigns have a DGR status. 

• You must have a receipt for the donation. 

• The donation must be voluntary and made without receiving anything in return. Donations linked to benefits, such as raffle tickets, fundraising dinners or auction items usually can’t be claimed. 

Remember to take a moment to check your donations are deductible before claiming to ensure your tax return is accurate. 

Spotting scams at tax time 

Scammers increasingly target the community at tax time. Be cautious of emails, text messages or phone calls claiming to be from the ATO. Remember to Stop, Check, Protect: 

• Stop: Never share personal information unless you trust the person and they genuinely require your details. 

• Check: Be wary of messages or links asking you to log in or provide information. 

• Protect: Act quickly! If you notice suspicious activity or something doesn’t feel right, don’t engage. Go to the ATO website or phone 1800 008 540 to check. Reporting scams, even if you didn’t respond, helps us protect you, your family, and the broader community. 

The ATO will not ask for personal details, passwords, or payments via links, email, or social media. 

Use trusted sources to get it right  

The safest way to check tax information is to rely on trusted, up‑to‑date sources, including: 

• ato.gov.au/individuals, which provides clear guidance for Australian taxpayers. 

• The ATO app, which offers tax time tips and access to your information. 

• A registered tax professional, who can provide advice tailored to your situation. 

• ATO Community, an online forum where you can read answers to common questions and ask your own. 

Using trusted sources and checking information early can help you avoid being caught out by misleading advice, reduce the chance of errors and make the tax process smoother.