'Deliberate mistakes': ATO warns of crackdown on three common errors

The mistakes include incorrectly claiming work-related expenses, inflating claims for rental properties and failing to include all income when lodging.

"These are the areas that people are most likely to get wrong, and while these mistakes are often genuine, sometimes they are deliberate," ATO assistant commissioner Rob Thomson said.

In 2023 more than eight million people claimed a work-related deduction and around half of those claimed a deduction related to working from home.

Last year, the ATO revised the fixed rate method of calculating a working from home deduction to broaden what is included, increase the rate and adjust record-keeping requirements.

"Deductions for working from home expenses can be calculated using the actual cost or the fixed rate method, and keeping good records gives you the flexibility to use the method that works for you, and claim the expenses you are entitled to," Mr Thomson said.

There are three golden rules for claiming a deduction for any work-related expense. You must have spent the money yourself and weren't reimbursed, the expense must directly relate to earning your income and you must have a record, usually a receipt, to prove it.

ATO data shows 9 out of 10 rental property owners are getting their income tax returns wrong.

"We often see landlords making mistakes when it comes to repairs and maintenance deductions on rental properties, so we're keeping a close eye on this," Mr Thomson said.

"This year, we're particularly focused on claims that may have been inflated to offset increases in rental income to get a greater tax benefit."

Performing general repairs and maintenance on your rental property could be claimed as an immediate deduction. However, expenses which are capital in nature (such as initial repairs on a newly purchased property and any improvements during the time you hold the property) are not deductible as repairs or maintenance.

The ATO is also warning against rushing to lodge your tax return on July 1.

If you have received income from multiple sources, you need to wait until this was pre-filled in your tax return before lodging.

"We see lots of mistakes in July where people have forgotten to include interest from banks, dividend income, payments from other government agencies and private health insurers," Mr Thomson said.

For most people, this information will be automatically pre-filled in their tax return by the end of July. This will make the tax return process smoother, save you time, and help you get your tax return right.

H&R Block's Mark Chapman said in his experience taxpayers tried to claim a range of "unusual" items including boob jobs, make-up, dogs and garden gnomes

But he said some things could be justified.

"It depends on the nature of the tax deduction and also your occupation," he said.

For example, believe it or not, garden gnomes could be a valid deduction.

"If someone has an investment property you can claim garden gnomes on the basis they improve the street appeal of that property," he said.

Mr Chapman encouraged people to keep all receipts.

"Keep all your paperwork together because if you don't you can't claim it," he said.

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