Australians are likely to make errors in their tax returns and miss out on deductions, with omission of interest income and failure to claim for depreciation on investment properties being the most common mistakes, according to a survey conducted by Count Wealth Accountants.
The survey asked accountants in the company’s network of more than 450 practices to rank the 10 most forgotten deductions and offsets, and the 10 most frequent errors individuals and self-employed people made in their tax returns.
Marianne Perkovic, chief operating officer of Count Wealth Accountants, said this year’s results indicated the most likely reason for errors and forgotten deductions was a lack of knowledge, especially regarding capital gains tax and depreciation.
Omitting interest was ranked as the number one error by 68 per cent of respondents, and Perkovic said along with understating income – which ranked at number four – this was a potential indicator of deliberate tax evasion which the Australian Taxation Office (ATO) views harshly.
Perkovic said errors and omissions relating to investments such as property and shares were also common.
“The laws governing tax on investments continually change. Keeping up to date on tax legislation is a challenge,” she said.
While Perkovic said it was difficult to put a dollar value on the amount Australians were losing due to errors, she said: “What came across in the survey was that errors went across all the different ranges of wealth”.
In 1999, Count conducted a similar survey which produced similar results. Perkovic said this showed Australians were continuing to make the same mistakes.
