With the tax return deadline just one month away (31 October), Hnry – Australasia’s leading digital accounting service for sole traders – is sharing the 5 most common mistakes during tax return time that self-employed Aussies should avoid at tax time.
Tax season can be particularly time-consuming, complicated (and boring) for sole traders who have the added headache of handling their own taxes. Hnry’s research shows that the average independent earner spends 8 hours and $1,000 preparing their tax return, alongside 7 hours every week on tax and financial admin – with many putting off the burden until the last minute.
But there’s still time for the nation’s 1.5m sole traders to get their shop in order before the deadline.
Hnry shares the 5 most common mistakes during tax return time:
- Not knowing your dates: Here’s the important dates to know to ensure you don’t miss out on important milestones or confuse which financial year your expenses and income fall under:
· 1 July 2023 – 30 June 2024: The 2023/24 financial year which the upcoming tax return covers. Any deductible business expenses must be from within this period.
· 1 July 2024: Beginning of the new 2024/25 financial year. Any expenses incurred after this will have to be lodged in next year’s tax return.
· 31 October 2024: Tax return due if you’re lodging by yourself.
· 15 of May 2025: Tax return due if you’re lodging through a tax agent / accountant.
- Miscalculating income and tax owed: If you have multiple income streams it can be particularly tricky to figure out exactly how much tax to set aside and could result in an unexpected tax bill. Tax calculators designed specifically for sole traders exist to help you get it right.
- Missing out on claimable tax deductions: Hnry research shows that the average sole trader misses out on over $5,500 in unclaimed expenses each year, with 33% saying it’s because they’re not sure what they can and can’t claim. Familiarise yourself with eligible deductions—such as home office costs, travel, and professional development—to maximise your refund.
- Forgetting your Super: If you’re one of the sole traders who have made concessional superannuation contributions each year, you could claim these as a tax deduction – another way to reduce the amount of tax you pay in your return.
- Not claiming all your vehicle expenses: If you travelled less than 5,000km for business in your car, you could claim a fixed amount per kilometer. This only applies to vehicles under one ton and holding fewer than nine passengers, so do your research to see if you’re eligible.