From air fryers to Armani: The wildest tax deduction fails this year

business man pool floatie holdng drinks expense deduction
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Tax time is here again, and while most Aussies are getting their receipts and spreadsheets in order, a few cheeky folks are trying to sneak some very questionable deductions past the ATO. Spoiler alert: an air fryer won’t cut it – no matter how essential it feels to your workday lunch routine.

The Australian Taxation Office (ATO) has revealed some of the most outrageous work-related expense claims it spotted last year, and let’s just say, some people really gave the “pub test” a nudge.

Take the mechanic who tried to claim an air fryer, microwave, two vacuum cleaners, a TV, gaming console and gaming accessories as work expenses. Unless your job description includes elite-level Mario Kart training, these clearly aren’t legit deductions.

Then there’s the truck driver who thought claiming swimwear was a fair go – apparently because they stopped somewhere hot and fancied a dip. Nice try, but boardies and bikinis are firmly in the “personal” bucket.

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And how’s this for a fashion faux pas? One manager in the fashion industry attempted to claim over $10,000 in luxury-branded clothing and accessories. The excuse? They needed to look sharp at events and functions. Unfortunately for them, unless the outfit is a uniform or occupation-specific (think chef’s hat, not Gucci belt), it’s a no from the ATO.

A friendly reminder from the taxman

Assistant Commissioner Rob Thomson says while most of us do the right thing, there’s always a few outliers.

“While a lunchtime dip might clear your head for work, swimwear for a truck driver is clearly not deductible,” Thomson said.

His message to business owners and employees alike: if you’re claiming a deduction, it needs to have a clear connection to your income and you’ve got to be able to back it up with solid records like receipts or invoices.

“If your deductions don’t pass the ‘pub test’, it’s highly unlikely they’ll meet our criteria,” Thomson said.

He added that common errors pop up every year, especially around work-related expenses, working from home claims, and undeclared income.

What can you claim?

Here’s a quick refresher on the ATO’s golden rules for work-related deductions:

You must have spent the money yourself and not been reimbursed

The expense must relate directly to earning your income

You need a record to prove it (yep, time to dig out those receipts)

And no, you generally can’t claim your daily commute or childcare costs. Nice try though.

The home office deduction: what’s changed?

Working from home has become the norm for many, and the ATO is keeping a close eye on these claims too.

There are two ways to calculate your home office deductions:

The fixed rate method – claim 70 cents per hour worked from home. This covers your internet, electricity, phone, stationery, etc.

The actual cost method – claim the actual expenses incurred, but you’ll need detailed records of everything, including how much was work-related.

Just don’t double dip. If you use the fixed rate, you can’t go claiming your Wi-Fi again somewhere else on the return.

Oh, and popping open your laptop to check one email between Netflix episodes doesn’t count. You’ve got to be genuinely working from home to claim it.

Side hustlers, this one’s for you

The ATO is also reminding people to declare all sources of income, including your side gigs. Whether you’re driving for Uber, selling candles on Etsy or tutoring after hours, it all counts.

Each income stream may have different allowable deductions – so don’t assume what flies in your 9-to-5 will work for your weekend hustle. If you’re not sure what deductions apply, the ATO has handy occupation-specific guides to help you out.

Tax time tips to stay in the clear

Here’s how to avoid trouble (and maybe even a call from the tax office):

Keep your receipts: the myDeductions tool on the ATO app makes this dead easy

Don’t guess: check the ATO website or chat with your registered tax agent

Be honest: dodgy claims can lead to penalties and interest, which nobody wants

Think before you claim: if you’d be embarrassed explaining it over a beer, it probably won’t fly

At the end of the day, the ATO’s not out to ruin your vibe, they just want people to play fair.

“If you’re not sure what you can or can’t claim, check the ATO website for detailed guidance, or ask your registered tax professional, if you have one,” Thomson said. “Don’t just claim it and hope for the best as penalties and interest may apply.”

So no, your new PlayStation isn’t a ‘productivity booster’ and your poolside bikini isn’t a uniform. But if you’re running a small biz or side hustle, there are plenty of legit deductions you can claim, just keep it real, and keep your records.

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Cec is a content creator, director, producer and journalist with over 20 years experience. She is the editor of Business Builders and Flying Solo, the executive producer of Kochie's Business Builders TV show on the 7 network, and the host of the Flying Solo and First Act podcasts.
She was the founding editor of Sydney street press The Brag and has worked as the editor on titles as diverse as SX, CULT, Better Pictures, Total Rock, MTV, fasterlouder, mynikonlife and Fantastic Living.
She has extensive experience working as a news journalist, covering all the issues that matter in the small business, political, health and LGBTIQ arenas. She has been a presenter for FBI radio and OutTV.

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