1. A spouse is mostly grouse

People often fail to include their spouse details - including de facto and same-sex relationships - in their tax return, which can cause problems with receiving tax rebates and offsets.

“If their spouses’ details are omitted, people may be paying the Medicare Levy at higher individuals rates rather than the couples rate,”.

“For senior Australians, some may only receive the Senior Australian Tax Offset at the single rate rather than the couples rate, resulting in additional tax being paid.” Private health insurance details should be included in your tax return, otherwise you may be paying a higher Medicare Levy Surcharge.

2. Stop that paper shredder

Lindsay says people are often busy purging records from their filing cabinets in July, but the ATO “requires records to be kept for a certain time period”.

“Things like depreciation records and dividend reinvestment information may need to be kept until a number of years after the asset is sold, so CGT can be calculated properly,” he says.

The ATO says generally people must hold on to written evidence of their tax deductions for five years. They should keep records of:

Payments received, including salary, pensions, share dividends or bank interest.
Expenses related to income received, such as work-related expenses or repairs made to a rental property.
Buying or selling assets such as shares or a rental property.
Tax-deductible gifts or donations.
Medical expenses.

3. Taxman has some targets

Second tax commissioner Jennie Granger says the ATO is paying particular attention to deductions for work-related expenses this year.

“We are concerned the difficult times may tempt more people to inflate their claims,” she says.

The ATO will target sales representatives, sales and marketing managers, truck drivers and electricians this year.

People must have incurred the expense in the year they are claiming it, and cannot claim a deduction for an expense reimbursed by their employer.

4. Driving my deductions is essential

Car expenses are one of the most common tax deductions, and the ATO says record keeping is vital.

PKF’s Laming says most people opt for the easiest way to claim motor vehicle costs - the cents per kilometre method, which is capped at 5000km.

However, the logbook method can deliver a bigger tax deduction for those who use their vehicle a lot for work.

“Make sure you actually have a logbook and it’s substantiated over a 12-week period, and that stands for five years,” he says.

5. Super can be a slippery slope

Several superannuation changes came into effect on July 1, which can seriously affect super strategies this financial year.

The amount people can salary sacrifice and enjoy a tax benefit has halved, to $50,000 for over-50s and $25,000 for others.

William Buck tax manager David Martland says another July 1 change will treat salary sacrificed income as assessable income for various income tests.

This will affect a popular strategy where some people salary sacrifice most of their wage and then claim a tax deduction for other super contributions, he says.

“Salary sacrifice super contributions will be an ineffective strategy for those using salary sacrifice arrangements to claim a deduction for a super contribution from July 1, 2009,” he says. “You should review your salary sacrifice arrangements now for the June 30, 2010, year.”

5 MORE Tax traps you can avoid