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Australian taxpayers make broadly the same set of mistakes every year, and the ATO has the data-matching to find most of them. The dollar value of getting deductions wrong cuts both ways: some Australians overclaim and face penalties, others underclaim and miss money they were legitimately entitled to.
Below is a 2026 lens on the six most common mistakes and how to avoid them.
Mistake 1: claiming 100% of mobile phone, internet, or computer when partly personal
The classic over-claim. You use your phone for work calls and personal calls. You claim the full bill as a work deduction.
The rule: you can only claim the work-related portion. Apportionment is required, and the method must be documented (a 4-week diary of work usage is the standard approach; you then apply the percentage to the annual cost).
Practical fix: keep a four-week log once, calculate the work percentage honestly, and apply it consistently across the year. For phone and internet you can claim up to $50 without substantiation, but the ATO can still ask how you calculated the figure.
Mistake 2: claiming work clothing that is not deductible
Conventional work clothing (a suit, a dress, business attire) is not deductible even if your employer requires you to wear it.
What is deductible: occupation-specific clothing (chef’s whites, hi-vis), protective clothing required by workplace hazards (steel-cap boots, sun-protective gear), and unique branded uniforms (a shirt with the company logo not available to the public).
Laundry: you can claim up to $150 of laundry without receipts, but the ATO can ask how you calculated the figure. Claiming exactly $150 every year without supporting workings is a known flag.
Practical fix: only claim if your clothing meets one of the three eligible categories. Photograph the uniform or document the occupation-specific requirement.
Mistake 3: claiming travel to inspect a residential rental property
From 1 July 2017, individuals (and most other entity types) cannot claim deductions for travel costs to inspect, maintain, or collect rent on a residential rental property.
Exceptions are narrow: you must be in the business of letting rental properties (a high bar), or an excluded entity (such as a company that is not a small business entity, or a public unit trust).
Practical fix: do not claim the travel. If you previously did, the ATO has been clear that this remains an active compliance issue and amended assessments can apply.
Property management fees paid to a real estate agent or property manager remain deductible.
Mistake 4: claiming capital works as immediate repairs
Repairs restore something to its original condition. Improvements upgrade it beyond original condition. Replacements of a whole item (entire fence vs patching a panel) are generally improvements.
Repairs are deductible in the year incurred. Improvements are capital works, depreciated over 25 to 40 years.
The classic mistake: replacing a damaged kitchen and treating it as a repair. The full kitchen is an improvement and must be capitalised. The ATO actively reviews this on rental property returns.
Practical fix: when commissioning rental property work, ask the tradesperson to itemise repairs vs improvements on the invoice. Get advice on borderline cases.
Mistake 5: not choosing the better WFH method
Two methods available for 2025-26: fixed rate 70 cents per hour (covers electricity, gas, phone, internet, stationery), or actual cost method (calculate actual additional expenses with apportionment).
Many taxpayers default to the fixed rate without testing whether the actual cost method would produce a bigger deduction. For people with a dedicated home office and high work-related usage, actual cost is often hundreds of dollars better.
Practical fix: calculate both methods for your 2025-26 situation and choose the higher.
Note: the 70-cent rate covers the bundled expenses. You cannot also separately claim electricity, gas, phone, internet, or stationery under the fixed rate. Depreciation on computers, monitors and office furniture is claimed separately under either method.
Mistake 6: missing deductions you actually qualify for
The other side of the ledger: deductions left on the table.
Income protection insurance premiums. Eligible income protection (insuring your salary against illness or injury) is deductible. Life insurance and TPD inside or outside super often is not. Check the policy structure.
Tax agent fees paid the prior year. Deductible in the year you paid them. Common to forget.
Work-related courses and professional development. Deductible if directly related to your current income-earning activity. Not deductible if intended to lead to a new occupation.
Professional memberships and subscriptions. Trade publications, professional bodies, software subscriptions used for work.
Depreciating assets used for work. Computers, monitors, printers, office furniture. Immediate deduction if under $300 with 100% work use; otherwise depreciated over effective life.
Investment expenses. Account-keeping fees on investment accounts, financial advice fees attributable to managing income-producing investments, investment journals.
Practical workflow for getting deductions right
Five steps.
Substantiate first, claim second. Records should exist at the time of lodgement, not constructed after the ATO asks.
Apply apportionment honestly. Phone, internet, vehicles, home office. Document the methodology once and apply consistently.
Run the WFH method comparison annually. The right answer can change with your circumstances.
Sweep for deductions you may be missing. Particularly tax agent fees from last year, income protection premiums, and work-related courses.
Use the ATO’s MyDeductions tool throughout the year. Free, captures evidence at the time of expense, exports straight into your return.
How Satori thinks about deductions
Our accountants will ensure you are paying the right amount of tax and not a cent more, by sweeping the eligible deductions you qualify for AND by avoiding the over-claim mistakes that invite ATO attention.
For clients with material complexity (investment property, business income, multiple income sources), the deduction conversation is part of the wider planning conversation, not a standalone item.
What to do next
Before EOFY, review your deduction list against the six mistakes above.
Test the WFH method comparison for your 2025-26 situation.
Confirm you have substantiation for every claim you intend to make.
Sweep for deductions you may have missed (tax agent fees, income protection, work courses, depreciating assets).
How Satori Advisory works
At Satori Advisory we integrate your tax, business, wealth and lending as a prosperity engine, aligned with what matters most to you. With a clear roadmap, informed by data and backed by decades of strategic experience, we simplify the complex. We don’t offer pre-packaged solutions. We deliver tailored, end-to-end advice that reflects your reality and ambitions. You’ll work directly with senior advisers who listen deeply, think boldly and act with purpose. Feel cared for by our trusted team and curated network of financial and business specialists, as we empower you to make smart decisions and realise your potential, powered by numbers.
Frequently asked questions
Can I claim 100% of my phone and internet as a tax deduction?
Only if you genuinely use them 100% for work. For most Australians, the personal-use portion must be excluded through documented apportionment. Up to $50 of phone and internet can be claimed without substantiation, but the ATO can still ask how you calculated the figure.
Can I claim my work suit on tax?
No. Conventional work clothing (suits, dresses, business attire) is not deductible. Only occupation-specific clothing (chef’s whites, hi-vis), protective clothing required by workplace hazards, and unique branded uniforms qualify.
Can I claim travel to inspect my rental property?
No, not for residential rental properties owned by individuals (or most other entities), under rules in force since 1 July 2017. Property management fees paid to a real estate agent remain deductible.
What is the difference between a repair and an improvement on rental property?
A repair restores something to its original condition (patching a damaged tile). An improvement upgrades beyond original condition (replacing the whole bathroom). Repairs are immediately deductible; improvements are capital works depreciated over 25 to 40 years.
What is the 70-cent WFH fixed rate?
For 2025-26, you can claim 70 cents per hour worked from home, covering electricity, gas, phone, internet, and stationery in a single rate. You cannot also separately claim these expenses. Depreciation on computers, monitors and office furniture is claimed separately.
Are tax agent fees deductible?
Yes, in the year you pay them. A common deduction missed by people who switch agents or do their own return.
Is income protection insurance deductible?
Generally yes, where the policy covers your salary against illness or injury and is held outside super. Inside super (group insurance through your fund) the position differs. Life cover and TPD are usually not deductible. Confirm with your tax agent or check the product disclosure statement.
Ready to talk?
If you would like a calm, no-pressure conversation about how this applies to your specific situation, we are here to help.
Please feel free to get in touch on 1300 925 081 or send an email to [email protected] if you’d like to book in a chat on the above or on other matters.
Disclaimer
This article contains general information only and has been prepared without considering your objectives, financial situation or needs. It is not personal financial advice, taxation advice or legal advice and should not be relied upon when making financial decisions. Before acting on any information, consider its appropriateness to your circumstances and seek professional advice where appropriate.
