Chartered accountant GAIL FREEMAN shares some of the try-ons people include in their tax returns.

There are always some outrageous claims people try to make in their tax returns.

Here are some the ATO has shared with us.

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  A truck driver tried to claim swimwear because it was hot where he stopped and he wanted to go for a swim. Obviously, the claim was denied. Swimwear is personal.

• Here’s one for the “I wish” category – a manager in the fashion industry claimed more than $10,000 for luxury branded clothing and accessories so as to be well presented at work and to attend after-hours activities. The claim was not allowed as the clothing was all conventional.
• A mechanic claimed an air fryer, microwave, two vacuum cleaners, a TV, a gaming console and gaming accessories as being work-related. The claims were disallowed as the expenses were personal.

Now, here are some helpful hints to help you avoid ATO scrutiny.

Keep your personal details up to date, addresses and bank account details.

I have had two clients not receive directors’ penalty notices because their address details were not up-to-date. The outcome is they did not comply with the notices and their companies were liquidated.

It’s amazing how many people tell me that they have shredded their receipts. You have to keep your receipts for a minimum of five years and in some cases a lot longer.

So if you don’t keep them your claims are at risk and could end up paying more tax than you need.

I have had a few cases recently where people didn’t have receipts in relation to expenses relating to a capital gain and the outcome was that we were unable to claim those costs.

This sounds like a motherhood statement, but always include all your income. The ATO has many sources of data and the income that you have not included could well be in one of those data sources.

The ATO therefore includes the missing income and charges you a penalty. Cryptocurrency profits and losses are items that I regularly find are forgotten as small crypto investors seem to think that they do not need to declare profits and losses from crypto.

When preparing apportionment claims for such things as floor area, deductible interest or capital gains, you will need a document showing your calculations in case you are ever queried by the ATO.

We see quite a few claims for apportionment purposes and the basis for the claim does not stack up. If you need guidance on how to apportion in your situation, we can help.

Always tell your tax accountant everything including any new loans you’ve had so that they can be claimed if relevant.

Too often we have finished a return when the client mentions something that would enable them to get an additional deduction. So it’s always better to mention any changed items when we are interviewing you.

The team that Gail Freeman & Co Pty Ltd wishes everyone a happy and prosperous 2026 and looks forward to providing you with tax, accounting and superannuation advice this year. Call 02 6295 2844, email [email protected] or visit gailfreeman.com.au

Disclaimer
This column contains general advice, please do not rely on it. If you require specific advice on this topic please contact Gail Freeman or your professional adviser. Authorised Representative of Lifespan Financial Planning Pty Ltd AFS Lic No. 229892.

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