Australia Markets close in 1 hr 45 mins

Aussies $1.65 billion out of pocket from unclaimed tax deductions

Aussies are leaking billions from unclaimed tax deductions. Source: Getty

If you did your tax return this year and weren’t sure what you could and couldn’t claim as a tax deduction, you probably lost out on a bit of cash, new reports show.

In fact, Aussies collectively are missing out on around $1.65 billion in unclaimed deductions due to confusion and poor understanding of entitlements, with harsh ATO laws fuelling fear of being audited, H&R Block said.

“Understanding all the deductions you are entitled to can be difficult – the law is complex and the potential to get into trouble with the ATO if you wrongly claim something can make doing your tax return yourself stressful,” H&R Block’s director of tax communications, Mark Chapman said.

“But, it’s important to remember that if you’ve paid for something as part of your job, you’ve not been reimbursed by your employer and you’ve got the paperwork –like a receipt or invoice – to prove that you spent the money, you should be able to claim a tax deduction.”

What are we doing wrong?

Around 66 per cent of Aussies don’t understand what they can and can’t claim on a tax return, meaning we’re not educating ourselves or seeking the right advice when it comes to tax time.

On top of that, over half of us (56 per cent) have left something off a tax return due to uncertainty.

And, one-in-four of us are missing out on items in our tax returns because we failed to keep a receipt of a proof of purchase.

What are we forgetting to claim?

While we’re claiming laundry or dry cleaning of uniforms the most, we’re forgetting to claim accommodation and work bags.

Around 74 per cent of Aussies aren’t claiming mobile handsets because they failed to keep a receipt or didn’t think the ATO would allow the claim.

Twenty-four per cent of Aussies also didn’t claim for mobile phone calls and data when they could have, H&R Block said.

Twenty-eight per cent of Aussies failed to claim for Wi-Fi, while 20 per cent failed to claim car expenses, 15 per cent failed to claim for public transport expenses and 21 per cent failed to claim for laundry expenses.

Make your money work with Yahoo Finance’s daily newsletter. Sign up here and stay on top of the latest money, news and tech news.

Yahoo Finance's All Markets Summit will take place on the 26th of September. Source: Yahoo Finance