Tax time is upon us again, and while many of us eagerly await that little boost to our bank accounts, there’s a stern warning from the Australian Taxation Office (ATO) that’s especially relevant this year.

With the cost of living biting harder than ever, it’s tempting to squeeze every last dollar out of your tax return.

But before you start getting creative with your deductions, you might want to think twice—because the ATO is watching, and the consequences for crossing the line can be severe.


Let’s be honest: who hasn’t looked at their tax return and wondered if they could claim just a little bit more?

Maybe that new laptop you bought for 'work', or those lunches that were 'sort of' business meetings.


With hundreds or even thousands of dollars potentially on the line, it’s easy to see why some Aussies might be tempted to stretch the truth.

But as criminal lawyer Avinash Singh points out, the most common way people get caught is by trying to claim personal expenses as business costs.

'People should be aware that over-claiming deductions or exaggerating expenses will likely result in being audited by the ATO,' he warned.


This year, the ATO is on a mission. There’s a renewed push to recover over $35 billion in unpaid taxes from small businesses and individuals, focusing on false and misleading deductions.

That means more audits, more scrutiny, and less tolerance for 'creative accounting'.

If you’re caught, the penalties can be eye-watering. The maximum penalty for obtaining a financial advantage by deception is a staggering 10 years in prison.

Even for less serious offences, you could be hit with a hefty fine, ranging from 25 per cent to 75 per cent of the amount you tried to claim, on top of having to pay back the money.

A recent Yahoo poll found that while 90 per cent of people say they’ve never lied on their tax returns, one in ten admit to 'pushing the truth'.

That might not sound like much, but according to consumer group Finder, it amounts to around two million Australians.

The most common fibs are over-claiming deductions or failing to report extra income, like money from overseas, capital gains, or even crypto earnings.

Interestingly, younger Aussies are the most likely to take the risk, with 17 per cent of Gen Z and 15 per cent of Millennials admitting to being less than honest, compared to just 5 per cent of Gen X and Baby Boomers.

With the cost of living soaring, it’s no wonder people are looking for ways to maximise their returns.

Finder’s personal finance expert Sarah Megginson says, 'As living expenses soar, many will be looking for strategies to maximise their tax return this year. But even a mistake you didn’t mean to make can cause trouble. Don’t risk making things worse by trying to "trick the system".'

The good news is, if you realise you’ve made an honest mistake, the ATO gives you up to two years to correct it.

So if you’ve accidentally claimed something you shouldn’t have, or forgotten to declare some income, it’s better to come clean sooner rather than later.

If your tax situation is a bit more complicated, maybe you’ve got investments, a side hustle, or overseas income, it’s worth getting professional advice.

A registered tax agent can help you navigate the process and ensure you claim everything you’re entitled to (and nothing you’re not).
Have you ever been audited by the ATO? Do you have any tips for fellow members on getting through tax season with your sanity (and your wallet) intact? Share your experiences and advice in the comments below.

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