The Australian Taxation Office is on the warpath again, and this time they're coming for your Tim Tams, cigarettes, and toilet paper.

That's right, if working Australians who have been using these items as work-related deductions in their tax return, be warned: the ATO is ready to crack down.

They'll begin scrutinising claims with returns being lodged from July 7, and they're expecting to start paying refunds from July 16.

This means that working Australians who have been using any of these items as deductions, need to prepare to face the wrath of the ATO.

And if they’re thinking of trying to claim any of these items in the future, think again: the ATO is likely to be dusting off its index of illegal and frankly bizarre claims.

Some of the weirder claims Aussies have tried to get money back from the ATO include dog food, dental work, gambling losses, toilet paper, cigarettes, vapes, and holidays that were not only unrelated to work, but they were also entirely faked.

Some Australians are claiming toilet paper as part of their tax deductibles despite not being a work-related item. Credit: AAP Image.​

In fact, in 2020, a man from NSW was given a fine of $1,500 and a criminal conviction for falsely claiming a fake holiday.

The ATO said: "The bank exec claimed more than $15,000 in travel expenses for ‘overseas conferences’ even though he hadn’t left the country that financial year."

It was said that while ATO keeps reminding us that deductions need to be related to earning an income, and that we need proof the amount has been spent, we just can't help ourselves when it comes to tax time.

ITP Accounting Professionals also released a statement regarding the issue, writing: "No matter how clear, people try to bend these rules."

"Many dubious claims are made in the ‘other’ expenses column, including non-allowable items such as wedding reception costs, dental, childcare, gambling losses, alcohol, and even cigarettes."

One man was fined for claiming a fake holiday in 2020. Credit: Uwe Moser/Getty Images/iStockphoto.​

ATO assistant commissioner Tim Loh also noted that people always list down items that could be accounted as personal expenses instead of deductibles, noting that some of these items include toilet paper rolls, tea, coffee, and Tim Tams.

Additionally, he urged people to not "copy and paste" deductions from previous years.

He said: "What was valid one year may not be true of the past 12 months - because, for instance, your employer may have reimbursed you."

Aussies who might think that their gym membership, yoga class, meditation app, and tooth whitener are tax deductions, are wrong, according to Mr Loh.

Many people are under the misconception that personal self-improvement is tax deductible, but that is not the case.

Personal self-improvement activities that do not necessarily help with your employability are not tax deductible. Credit: Shutterstock/SeventyFour.​

However, it was revealed that education is often overlooked by most Australians despite the fact that it qualifies as a deductible because it can help you — should you plan to reintegrate back to the workforce — improve your employability.

Only 30% of Australians are spending over $1,900 a year on education, and getting a tax deduction for it. The other 70% of us are missing out.

On average, Australians spend about $587 a year on education. But with the average tax return being $2,600, Aussies could be getting a lot more back if we took advantage of this deduction.

The Australian Taxation Office (ATO) has announced that the deadline for lodging your tax return for the fiscal year July 1, 2021 to June 30, 2022 is 31 October, 2022. That means if you want your tax return to be processed without any hitches, you need to get it in by that date.

The ATO said in 2022 it aims to finalise returns within 12 days of receiving them - but that doesn't take into account any errors or missing information, which could delay your refund further.

So if you want to avoid any last-minute stress (and potential fines), make sure you get your tax return lodged as soon as possible.

 

[Ricci]

As someone who spent the majority of their working life as a Taxation Consultant the only comment I would make is that a lot of people are under the misapprehension that Tax Consultants will get you more back as they can get away with more. They can't. A reputable Consultant knows the law and works within it. They will however put in anything you insist upon because at the end of the day you are responsible, you sign it to say it's true. If they think you are deliberately evading tax they can call the ATO and have a flag put on your file.