Common Mistakes Australian Students Make on Their First Tax Return (and How to Avoid an ATO Review)
Updated: 4 days ago
Quick Answer:
The most common first-tax-return mistakes students make are skipping lodgement because they think they earn “too little,” incorrectly claiming the tax-free threshold on more than one job, claiming HECS-HELP fees as a deduction, and leaving out income like bank interest or side hustle earnings. Fixing these lowers your chance of an ATO review and gets your refund processed faster.
Do Student Tax Return Mistakes Include Not Lodging Under $18,200?
Yes, if any tax was withheld from your pay. Skipping your return because you assume your income is “too low to matter” is one of the most common mistakes students make, and it usually just means leaving your own refund unclaimed.
If you had zero tax withheld all year and earned under $18,200, you're not required to lodge a full return, but you should still submit a non-lodgement advice to the ATO, rather than doing nothing. Leaving your record blank can prompt the ATO to follow up asking why no return was lodged.
Can I Claim the Tax-Free Threshold on More Than One Job?
Not without a downside. Claiming the tax-free threshold with every employer under-withholds your tax and often turns an expected refund into a tax bill.
On your Tax File Number (TFN) declaration for each job, you're asked whether you want to claim the tax-free threshold. Many students tick “yes” for every job because it sounds like free money, but the threshold only exists once. The correct approach is to claim it with your highest-paying employer only and leave it unclaimed with the others. That way each employer withholds roughly the right amount, and you're not caught out with an unexpected bill at tax time.
Can I Claim My HECS-HELP Fees as a Tax Deduction?
No. University tuition paid through HECS-HELP or as a Commonwealth-supported place is one of the most commonly and incorrectly claimed “deductions” on a student's first return.
It's an easy mistake: your course fees feel like a work-related cost, especially if you're studying something related to your job. But the ATO specifically excludes HECS-HELP and Commonwealth-supported tuition from self-education deductions, no matter how relevant the course is to your current work. Only genuine out-of-pocket study costs, like textbooks, stationery, and work-related course fees paid upfront outside HECS-HELP, are claimable.
Do I Need Receipts for My Work-Related Deductions?
Usually yes. You can claim up to $300 in total work-related expenses without receipts, but you still need to be able to show you spent the money and how you worked out the claim.
Above that $300 total, you need actual written evidence for each expense. Clothing and laundry claims are a well-known ATO focus area: everyday clothes worn to work (even if your boss expects you to look neat) aren't deductible. Only genuine compulsory uniforms or protective clothing qualify, and laundry for those items is capped at a reasonable estimate within the overall $300 no-receipt limit. Claiming a round “$300” every year without any basis for the figure is exactly the kind of pattern that draws attention.
Can I Claim My Whole Phone or Internet Bill as a Deduction?
No. You can only claim the work-related percentage of a phone or internet bill, and claiming the full amount is one of the most common overclaims on a first return.
If you use your phone or home internet for both uni, personal life, and any part-time work, you need a reasonable basis for the work-related portion, like a representative four-week diary of your usage, rather than guessing a round number. The private, personal-use share of the bill is never deductible.
Do I Have to Declare Bank Interest and Side Hustle Income?
Yes. All income counts, including small amounts of bank interest and any side hustle or cash-in-hand earnings, and leaving it off is an easy way to trigger a mismatch with the ATO's own records.
Banks report interest paid to you directly to the ATO, and it will usually already be sitting in your pre-fill. Leaving it out doesn't hide it, it just creates a mismatch the ATO's systems pick up automatically. The same goes for side hustle income from platforms like Uber or food delivery apps, which are increasingly reported straight to the ATO too. Reporting everything up front is simpler than dealing with an amendment later.
Which Student Tax Return Mistakes Can Trigger an ATO Review?
Reviews are usually triggered by a mismatch between what you report and what the ATO already knows, or by deductions that look unusually high for your income and occupation.
Mismatched income: Income that doesn't match your employer, bank, or platform data on file.
Outsized deductions: Claiming amounts that are unusually large compared to others in similar jobs, without matching evidence.
Estimated figures: Rounded, guessed figures instead of your actual receipts or pre-filled data.
Frequent amendments: Lodging, then repeatedly amending the same return with new figures.
Tip: The simplest way to avoid a review: use your actual pre-filled income, only claim deductions you can genuinely substantiate, and don't round numbers up just in case.
What Happens If I Lodge My Tax Return Late?
A failure-to-lodge penalty can apply once you miss the 31 October deadline, calculated in 28-day blocks, though the ATO often shows leniency to first-time filers with a straightforward refund.
Lodging through Tax Falcon before 31 October usually gives you a later deadline the following year, which takes the pressure off if you're unsure about deductions or waiting on documents. It's also a practical way to avoid the mistakes above altogether: Tax Falcon's registered agents check your income and deductions against these exact rules before your Student Tax Return is submitted, for $69.
For the ATO's own guidance on record-keeping and what you can claim, see ato.gov.au.
Frequently Asked Questions
What happens if the ATO finds a mistake on my tax return?
Honest mistakes caught and fixed quickly rarely lead to penalties for first-time filers. The ATO may adjust your assessment itself, or you can lodge an amendment. Either way, it's worth fixing rather than ignoring.
Can I fix a mistake after I've already lodged my tax return?
Yes. You can lodge an amendment yourself, or through Tax Falcon, generally within two years of your original assessment for most individual taxpayers.
Does the ATO check every tax return for mistakes?
Not manually, but automated data-matching against banks, employers, and platforms flags mismatches on every return, and unusually high deductions for your occupation are more likely to get a closer look.
Will lodging with a tax agent reduce my chance of an ATO review?
Generally, yes. Tax Falcon's registered agents check your figures and deduction eligibility against the rules before lodging, which catches many of the common first-time mistakes above before they reach the ATO.
How far back can the ATO amend my tax return?
Generally two years from your original assessment for most individual taxpayers, though this can vary in more complex cases.
Want your first tax return checked before it's lodged? Start My Return with Tax Falcon's $69 Student Tax Return service and let its registered agents catch these mistakes before the ATO does.
