When your friends know you’re a tax accountant, dinnertime conversations often turn into impromptu financial therapy sessions. Between bites of pasta and sips of wine, they confess their tax sins, hoping for absolution—or at least some free advice.
Over the years, these chats have revealed some spectacular tax return mishaps that have to be shared. Each one comes with its own very important message, and by the end, you’ll probably be keen to book in with a tax accountant.
Note: Names have been changed to protect the egos of my financially adventurous friends!
1. “Everything’s a Business Expense”
Sarah, bless her entrepreneurial heart, decided that starting a fashion blog meant every new outfit was suddenly tax-deductible. “But I wore it in my Instagram posts,” she argued, showing me receipts for designer heels and cocktail dresses.
The ATO wasn’t quite as impressed with her creative accounting. The rule: Business expenses need to be directly connected to earning your income. That sequined jumpsuit? Probably not making the cut.
2. “I’ll Just Copy Last Year’s Numbers”
Mike usually keeps meticulous records, but one busy year got the better of him. “Everyone fudges their numbers a bit, right?” he rationalized over drinks. That was the year his circumstances had completely changed, new job with different deductions, an investment property purchase, significant changes in his work, related expenses. But rushing to meet the deadline, he’d basically copied his previous return with a few tweaks. “Of all the sloppy returns out there, they had to pick mine to audit,” he groaned.
The ATO’s data matching systems spotted the discrepancies. What followed was six weeks of document hunting, explaining discrepancies, and stress-induced sleepless nights. These days, Mike tracks his deductions religiously throughout the year and has a dedicated folder for tax-related documents. “Never again,” he says, shuddering at the memory of that audit.
Photo by Nataliya Vaitkevich
3. “My Phone Photos Are My Filing System”
Emma kept all her receipts—technically. They lived as blurry photos on her phone, mixed between selfies and food shots. Come tax time, she spends days scrolling through her photos, trying to collect all the digital images, many showing only partial amounts or dates.
Pro tip: Make folders and move all your receipts over as they come in. It takes a few seconds to do, and it’ll save you days of work sifting through selfies.
4. “Cash Jobs Don’t Count”
Tom was about to start a side gig as a weekend handyman. “It’ll just be a bit of cash here and there—probably not worth declaring,” he mused over coffee. That “bit of cash” was likely to add up to a substantial amount, and his plan would have caused him serious problems down the track.
The conversation shifted when I mentioned another friend’s credit card application getting rejected because their declared income wasn’t high enough to qualify. That caught Tom’s attention. Then we discussed how modern banking systems make it surprisingly easy to spot undeclared income – regular cash deposits, payments through bank transfers, even those handy payment apps all leave a digital trail.
The real wake-up call came when we turned to his five-year plan to buy a house. You should’ve seen the look on his face when we calculated how much hiding income would sabotage his borrowing capacity.
On just his main job’s income, he’d qualify for about $150,000 less than if he declared his side gig too. “You’d be literally making yourself look poorer on paper,” I explained, “and missing out on deductions because you can’t claim expenses on income you’re pretending doesn’t exist.”
5. “I’ll Do It Last Minute”
Rachel’s tax strategy involved waiting until October 31st, then panic-calling every accountant in Melbourne. When they were all booked solid, she’d attempt a DIY job at 11 PM, missing out on deductions she didn’t know she could claim. Those missed deductions could have paid for a rather nice holiday. It took her a few years of this to finally sort her taxes out on time.
6. “My Super Will Sort Itself Out”
James had multiple super accounts from various jobs, all with default investment options and insurance policies. “They’re professionals, they’ll handle it,” was his mantra. Meanwhile, he was paying multiple sets of fees and premiums for insurance policies that would likely only pay out on one account anyway. A quick super consolidation could have saved him thousands.
The beautiful thing about tax mistakes is that they’re incredibly educational, especially when someone else makes them first. Each of these friends eventually sorted out their tax troubles, though some required more professional help than others. They’ve all emerged wiser, if slightly poorer in some cases.
When your friends know you’re a tax accountant, dinnertime conversations often turn into impromptu financial therapy sessions. Between bites of pasta and sips of wine, they confess their tax sins, hoping for absolution—or at least some free advice.
Over the years, these chats have revealed some spectacular tax return mishaps that have to be shared. Each one comes with its own very important message, and by the end, you’ll probably be keen to book in with a tax accountant.
Note: Names have been changed to protect the egos of my financially adventurous friends!
1. “Everything’s a Business Expense”
Sarah, bless her entrepreneurial heart, decided that starting a fashion blog meant every new outfit was suddenly tax-deductible. “But I wore it in my Instagram posts,” she argued, showing me receipts for designer heels and cocktail dresses.
The ATO wasn’t quite as impressed with her creative accounting. The rule: Business expenses need to be directly connected to earning your income. That sequined jumpsuit? Probably not making the cut.
2. “I’ll Just Copy Last Year’s Numbers”
Mike usually keeps meticulous records, but one busy year got the better of him. “Everyone fudges their numbers a bit, right?” he rationalized over drinks. That was the year his circumstances had completely changed, new job with different deductions, an investment property purchase, significant changes in his work, related expenses. But rushing to meet the deadline, he’d basically copied his previous return with a few tweaks. “Of all the sloppy returns out there, they had to pick mine to audit,” he groaned.
The ATO’s data matching systems spotted the discrepancies. What followed was six weeks of document hunting, explaining discrepancies, and stress-induced sleepless nights. These days, Mike tracks his deductions religiously throughout the year and has a dedicated folder for tax-related documents. “Never again,” he says, shuddering at the memory of that audit.
3. “My Phone Photos Are My Filing System”
Emma kept all her receipts—technically. They lived as blurry photos on her phone, mixed between selfies and food shots. Come tax time, she spends days scrolling through her photos, trying to collect all the digital images, many showing only partial amounts or dates.
Pro tip: Make folders and move all your receipts over as they come in. It takes a few seconds to do, and it’ll save you days of work sifting through selfies.
4. “Cash Jobs Don’t Count”
Tom was about to start a side gig as a weekend handyman. “It’ll just be a bit of cash here and there—probably not worth declaring,” he mused over coffee. That “bit of cash” was likely to add up to a substantial amount, and his plan would have caused him serious problems down the track.
The conversation shifted when I mentioned another friend’s credit card application getting rejected because their declared income wasn’t high enough to qualify. That caught Tom’s attention. Then we discussed how modern banking systems make it surprisingly easy to spot undeclared income – regular cash deposits, payments through bank transfers, even those handy payment apps all leave a digital trail.
The real wake-up call came when we turned to his five-year plan to buy a house. You should’ve seen the look on his face when we calculated how much hiding income would sabotage his borrowing capacity.
On just his main job’s income, he’d qualify for about $150,000 less than if he declared his side gig too. “You’d be literally making yourself look poorer on paper,” I explained, “and missing out on deductions because you can’t claim expenses on income you’re pretending doesn’t exist.”
5. “I’ll Do It Last Minute”
Rachel’s tax strategy involved waiting until October 31st, then panic-calling every accountant in Melbourne. When they were all booked solid, she’d attempt a DIY job at 11 PM, missing out on deductions she didn’t know she could claim. Those missed deductions could have paid for a rather nice holiday. It took her a few years of this to finally sort her taxes out on time.
6. “My Super Will Sort Itself Out”
James had multiple super accounts from various jobs, all with default investment options and insurance policies. “They’re professionals, they’ll handle it,” was his mantra. Meanwhile, he was paying multiple sets of fees and premiums for insurance policies that would likely only pay out on one account anyway. A quick super consolidation could have saved him thousands.
The beautiful thing about tax mistakes is that they’re incredibly educational, especially when someone else makes them first. Each of these friends eventually sorted out their tax troubles, though some required more professional help than others. They’ve all emerged wiser, if slightly poorer in some cases.
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