7 Common Tax Mistakes Part-Time Students Make in Australia
Being a working student can get quite difficult, juggling both your job and studies. It will be busy and you’ll have a ton of priorities on your plate, including paying taxes. Yes, even as a student, you have to start being responsible with your taxes, which can have you make the most out of tax return AND avoid any hefty penalty fees.
But besides learning about how to pay your taxes properly, you also have to learn what to avoid doing. With that said, read on as I show you the seven common tax mistakes working students make in Australia.
Common Tax Mistakes Working Students Make In Australia
We all know how difficult it is paying taxes, whether you’re a big or small company, freelancer or solo entrepreneur. So if you’re still a working student without much knowledge on paying taxes, be aware of these seven common tax mistakes:
- You Include Some Dodgy Deductions
This is a very common mistake many make, especially from students who study in one field but work in another. Some students presume they can claim self-education expenses such as for travel, laptops, or course fees.
But note that self-education expenses are eligible only if your course is related to where you’re working. Evaluate your expenses and avoid putting it in your tax deductions and returns.
- You Don’t Claim What You Can
While some students might add dodgy expenses, others don’t claim expenses that they’re eligible for! These are some things you can claim expenses from:
- If your academic qualifications are improving from the job you’re working for while studying
- When you’re improving both knowledge or skills at your current employment
- Your self-education course and being a trainee is required in the traineeship
- You can show that your degree, qualification, or course leads to an income increase within your current job
Make sure that you’re familiar with deductions you can claim to save more!
- Buying Instant Tax Deductions
To claim deductions, it needs to be related to your job directly. If you want to claim a deduction from office supplies, you need to use it for your job. Also, note that you can’t claim items worth over $300 in full, as it needs to be depreciated, taking a few years.
Also, do NOT be afraid of catching up on any skipped tax returns because of any interest or fines.
- Not Keeping Proper Records
No matter if you’re a student or business, you need proper documentation of all things you plan on claiming. It’s recommended to have a file or box of all your receipts, as well as a list of what you spent, so you can claim deductions during tax season. Keep logs of everything you’re able to claim to lessen the hassle!
- You Don’t File Tax Returns At All
If you’re earning under tax-free thresholds and or haven’t paid taxes, you still need to notify your local Australian Tax Office with non-lodgment advice. It’s also best to catch up on any taxes you do need to pay, which may give you bonus returns!
Also, if you have received Austudy, check your tax situations when the financial year begins. This prevents any potential tax bias and penalties.
- Pay Tax as an International Student
For students studying in Australia and earning from work, then you’ll need to do tax returns. For some international students or non-residents, they make a mistake of paying the same tax rates as residents. It’s best that you check up on the specific tax rates as an international student and consult with a tax agent for advice.
- Try DIY Complicated Tax Returns
Do NOT try to make your own complicated tax return. It’s best to have a tax agent do this, as you can get a deduction on your next tax returns AND avoid any trouble from the Australia Tax Office. Plus, the tax agent fees aren’t as high as you’d expect, saving you time and effort along the way.
Wrapping It Up
Working students don’t need to spend so much time and effort in paying their dues. By becoming aware of the different tax mistakes, you can be well on your way to pay your taxes on time and sensibly. If you’re still having trouble, there are different companies and software available all over Australia like in Brisbane that can help you without the huge fees.
Hopefully, this article on the seven different tax mistakes working students make in Australia gave you an idea on what you shouldn’t do. So start learning more about paying taxes correctly and be more responsible with your duties as a taxpayer now!
If you have any more questions or want to share your own experiences in paying taxes as a working student, then comment below. Your thoughts are much appreciated.