ATO Tax Time Focuses for 2025
The Australian Taxation Office (ATO) has revealed some of the ‘wild’ work related expense tax claims people have tried to put past the ATO, and spoiler alert: an air fryer generally won’t make the cut.
Some of the most outrageous deduction attempts the ATO saw last year included:
- A mechanic tried to claim an air fryer, microwave, 2 vacuum cleaners, a TV, gaming console and gaming accessories as work-related. The claim was denied as these expenses are personal in nature.
- A truck driver tried to claim swimwear because it was hot where they stopped in transit and they wanted to go for a swim. The claim was denied as these expenses are personal in nature.
- A manager in the fashion industry tried to claim well over $10,000 in luxury-branded clothing and accessories to be well presented at work, and to attend events, dinners and functions. The clothing was all conventional in nature and was not allowed.
ATO Assistant Commissioner Rob Thomson reminded taxpayers that the ATO’s role is to collect the correct amount of tax that is owed, and exaggerated deduction attempts would not be tolerated.
‘While some people have tried their luck with unusual work-related deduction claims, most people realise to be able to claim an expense, it needs to meet strict criteria.
Working from Home
One of the most-claimed work-related expense each year is a working from home deduction. In 2024 more than 10 million people claimed a work-related deduction, and many of those claimed a deduction related to working from home.
There are 2 ways you can calculate your deduction for additional expenses you incur by working from home – the fixed rate method or the actual cost method.
In order to claim a working from home deduction, you must be working from home to fulfil your employment duties (not carrying out minimal tasks) and you have to have records to prove you incurred additional expenses due to working from home.
Using the fixed rate method allows you to claim 70 cents for every hour you work from home and covers your additional running expenses that are often difficult to apportion, like internet, phone usage, electricity and stationery.
To claim using the actual cost method, you must have records of all the expenses you claim, and the work-related use of your expenses to back up your deduction.
Declare all Sources of Income
The ATO is also reminding Australians to declare all sources of income, and make sure they are included on their tax return. This includes side-hustles, for example if you are providing ride sourcing services or selling services via an app.
Each source of income you have will have different deductions available to you, depending on the nature of the income and your occupation.
More information on specific deductions for different jobs is available in the ATO’s occupation and industry specific guides.
If you have any questions or queries relating to your Tax Return please don’t hestiate to contact us at STS Accounting.
