This end of financial year, small business owners are being urged to look beyond convenience when it comes to lodging their tax returns.
As cost-of-living pressures squeeze households and businesses alike, new research from H&R Block Australia shows that many self-employed Australians could be unknowingly short-changing themselves, by more than $500 on average.
According to the study, 66 percent of self-lodged returns reviewed by a tax professional contained missed deductions, with the average value of those missed claims sitting at $525.50. That is money that could be better spent reinvested in a business or helping cash flow during a tighter season. “In a year when every dollar counts, that’s money Australians can’t afford to leave behind,” says Mark Chapman, Director of Tax Communications at H&R Block.
Simple tools, complex problems
For many small business owners and sole traders, the ATO’s MyTax platform seems like an easy fix. It is promoted as fast, free and simple. But that simplicity may come at a cost. Chapman explains, “MyTax is designed to be simple, but that’s exactly where it falls short. It’s a one-size-fits-all tool that doesn’t ask the kind of follow-up questions a tax agent would, and that’s where people miss out.” What seems like an efficient process often overlooks the complexity of modern work.
According to Chapman, once someone has a side hustle, investments, property income or even work-from-home expenses, their return is no longer a basic one. “The ATO doesn’t tell you what you’re entitled to claim, that’s up to you,” Chapman says. “And in a year where budgets are stretched, getting it right can make a real difference. It’s time Australians rethink the idea that fast equals effective when it comes to tax.”
Confidence gap among taxpayers
The survey also highlighted a concerning gap in confidence. While younger Australians are the most likely to use MyTax, they are also the least confident about doing so. Only 18 percent of respondents said they felt very confident in knowing what they could claim, and nearly half of them, 48 percent, admitted they were unsure when tax laws change. This uncertainty often results in a cautious approach, with taxpayers skipping deductions they could legally claim simply because they are afraid of getting something wrong. Chapman notes, “It’s understandable that people want a fast and easy solution, but relying solely on pre-filled data through MyTax can lead to overlooked deductions.”
One in three Australians only realised they had missed deductions after lodging their return. That means their money may be gone for good unless they amend their submission, which many do not do. And perhaps most revealing, only 32 percent of MyTax users believe the tool delivers the maximum refund they are entitled to.
“If you’ve started a side hustle, invested in shares, bought property, or even just worked from home, your return is no longer simple,” says Chapman. “The ATO doesn’t tailor its prompts to your situation. That’s why so many people think they are doing it right and only discover the gaps after it is too late.”
The findings show that many people who choose to self-lodge via MyTax may not be doing anything wrong, but they are not doing everything right either. Without a deeper understanding of the tax system, they often miss out on what is legally theirs to claim. “When a tax professional reviews a DIY return, they often uncover deductions the taxpayer didn’t know they were entitled to,” Chapman says. “On average, these missed claims were worth $525.50, showcasing just how much money could be left on the table without expert guidance.”
Professional tax agents offer more than form-filling. They understand nuances like industry-specific deductions, changes in legislation, and how to maximise claims without raising red flags. For small business owners juggling multiple roles and income types, this knowledge can result in a significant financial difference. With just weeks left until 30 June, time is running out for small businesses to make smart decisions about their tax strategy. Chapman urges business owners to slow down and think carefully before submitting a return via MyTax this year.
“Australians are being urged to think twice before hitting ‘submit’ on MyTax this year,” Chapman says. “If you’ve started your return but aren’t sure you’ve claimed everything, getting guidance from a tax professional could make all the difference. It’s often the difference between a basic return and one that’s been maximised for your unique circumstances.”
Get more back from what you’ve already earned
For small business owners, EOFY is more than paperwork, it is an opportunity. Whether it is recovering operating expenses, properly claiming home office costs, or unlocking hidden deductions from vehicle use and software subscriptions, getting the return right means more financial breathing room. And in a time where financial pressure is high and business costs are rising, that $525.50 could make a real difference. “If your return is more than just a payslip, your tax strategy should be more than just MyTax,” says Chapman.
To learn more or find your nearest H&R Block office, visit www.hrblock.com.au.
Disclaimer: This article is for general information only and does not constitute financial or tax advice.
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