Australians are being urged to ensure they are tax literate as EOFY approaches, with CPA Australia warning that too many people are making costly mistakes on their tax return.

The accounting body issued a “stark message” to taxpayers on Monday, saying the Australian Tax Office (ATO) will be scrutinising expenses closely this year, especially remote work claims.

“The level of incorrect tax returns in this country tells us too many Aussies aren’t tax literate,” said CPA Australia’s resident tax expert Elinor Kasapidis.

“There is a multibillion-dollar shortfall between Australia’s tax take and what people should be paying. For some groups of taxpayers over 90 per cent of returns are wrong.”

There is no shortage of things for taxpayers to keep in mind as they prepare their 2023-24 returns this year, from new rules around work from home deductions to a side hustle crackdown.

CPA has proposed a three-step framework to help families get their affairs in order this year – record, be realistic, and reach out.

“The Australian tax system is way too complex; it’s one of the most complex in the world. The way our tax system works, if you don’t claim a legitimate deduction, you won’t get it,” Ms Kasapidis said.

“Plenty of taxpayers miss out on refunds because they don’t know what they can claim. With cost-of-living biting, a few hundred dollars in missed deductions may really hurt this year.”

Tax time: Three Rs

The first step in getting your head around your 2023-24 tax return is working out what evidence you have for claims related to work expenses or your remote office.

In other words, those that record everything are in a better position to maximise their return.

That’s particularly the case this year, with a COVID era shortcut method for WFH expenses now lapsed, requiring workers who want to make these claims to provide additional evidence.

That includes a real-time diary of the hours you’ve worked from home, though your employer is able to assist you with providing this evidence too.

“Get your record keeping right this tax time,” Ms Kasapidis said.

“Ensure you’ve got copies of receipts. Keep a detailed diary throughout the year noting down when you worked from home.”

The second R is realism – the tax office has its eyes wide open for dodgy claims this year.

“The tax office is unlikely to accept a deduction for a packet of Tim Tams eaten in your coffee break at home,” Ms Kasapidis said.

“As much as your colleagues like to see your pot plants, the ATO won’t accept claims for home-office décor.”

Australians are also being encouraged to reach out to a professional this year, particularly with changes to WFH deductions now requiring more complex depreciation calculations to be made.

There are no shortage of options for those looking for advice, and it doesn’t need to be costly, either.

In fact, many taxpayers can access free advice from government-funded tax clinics run out of universities across the country.

More than a dozen clinics exist, and they are staffed with experts that can help you demystify tax time and improve literacy.

A full list is available on the Australian Taxation Office (ATO) website.