ATO assistant commissioner Rob Thomson said they saw some fairly “outrageous” claims last year.
These included:
A taxpayer had a two-day conference in Sydney and wanted to get some headshots done, so they tried to claim a haircut as a work-related expense
A truck driver wanted to claim a pair of swimmers because he stopped at a pool near a highway for a lunchtime dip
A person in the fashion industry wanted to claim $10,000 worth of luxury clothing and goods to be “well presented” at work
A real estate agent tried to claim over $30,000 for their new veneers
“Maybe they were trying to distract from the fact that the third bedroom wasn’t really a third bedroom – who knows,” Thomson said.
Two-thirds of people who submitted a tax return last year included work-related expenses, which you’re able to deduct from your taxable income if they’re legitimate.
Finder research revealed last year that while 90 per cent of people do the right thing, there is a small portion of the population who outright lie on their returns.
RELATED
Roughly two million people have tried to slip something through that wasn’t true, with 5 per cent adding more deductions, while 3 per cent didn’t report overseas income.
“If your deductions don’t pass the pub test, it’s highly unlikely your claim would meet the ATO’s strict criteria,” he said.
“Work-related expenses must have a close connection to your income-earning activities, and you should be prepared to back it up, with records like a receipt or invoice.”
Do you have a story? Email stew.perrie@yahooinc.com
Thomson also warned people to make sure that every deduction isn’t just a personal expense that millions also have.
“Don’t fall into the trap of thinking you can claim expenses like travel to and from work and childcare costs,” he said.
“These expenses are personal in nature and cannot be claimed. When in doubt look for guidance on the ATO website or speak with your registered tax agent.”
With the cost-of-living crisis gripping peoples’ wallets, many have turned to other streams of income to keep food on the table and a roof over their heads.
“You might think your side hustle is just a hobby but the ATO will disagree,” he said.
The tax expert said this applies if you Uber or even pick up a few jobs on Airtasker as all these businesses will report to the ATO.
He warned those renting properties, or even part of one, through platforms like Airbnb or Stayz, the ATO are on to you too.
“The ATO has numerous third-party sources of data which it can use to identify if you are receiving rent and they are on the lookout for mismatches with the tax return data that you report,” Chapman said.
The ATO has also warned people about trying to make the same deduction twice.
Taxpayers in the past will try to go down the tax office’s fixed hourly rate because they work at home, but then send through separate deductions for things like internet or a work chair.
People have also tried to do the same thing with their cars.
The tax office allows you to go down one of two methods.
The ATO has revealed what it will be watching this year when 15 million taxpayers submit their tax returns. (Source: Getty)
You can either do the fixed rate for WFH expenses or your vehicle, which can be far easier but might mean you miss out on a bigger return, or you can jot down every single expense or kilometre driven and claim it that way.
The fixed rate for working from home is 70 cents an hour, while for cars it’s 88 cents per kilometre for every business kilometre you cover.
The WFH fixed-rate method encompasses things like energy, bills, rent, and internet service.
But what you cannot claim both methods.
“If you are going to use those methods, make sure you have had a look at the ATO website, understand what’s included in that method so you don’t double dip,” Thomson said.
“You don’t double dip the chip in the French onion dip at parties. Don’t double dip on the tax return.”
