logo
The Conversation: Would you cheat on your tax? It's a risky move, the tax office knows a lot about you

The Conversation: Would you cheat on your tax? It's a risky move, the tax office knows a lot about you

West Australian13-07-2025
Soon, more than 15 million Australians should be lodging a tax return with the Australian Taxation Office in the hope of receiving at least a small refund.
About 60 per cent of taxpayers use an accountant to prepare their tax return while the other 40 per cent lodge their returns via their MyGov account. This links them to the tax office, Medicare and other government services.
The tax office receives about 1000 tip-offs a week from people who know or suspect evasion. Of these, the office deems about 90 per cent warrant further investigation.
These days, the tax office pre-fills much of your income information. The ATO will let you know through your MyGov account when your income statements from your employer are 'tax ready'.
But other income including bank interest, dividends and managed investment funds distributions may take longer to appear, so don't rush to complete and lodge your tax return on July 1 if these aren't there. When these items pre-fill, check them for accuracy and correct any errors.
The tax office does not know about all your income so remember to provide details of other sources including capital gains on investments and income from other jobs for which you have an Australian Business Number.
Some items, such as private health insurance information, are only partially pre-filled so be sure to check that all questions have been answered and all necessary information provided.
To claim a deduction you must have spent the money yourself and were not reimbursed from another source.
The expense must be directly related to earning your income from either employment or services provided, from investments such as shares or a rental property, or from a business you operate.
And you must have a record to prove your expense. This usually needs to be in the form of a receipt or a diary.
If you don't know how to record your deductions, an easy option is to use the tax office myDeductions app. You can scan receipts and allocate them to the correct section of your return.
Each year the tax office targets particular areas. For 2025, these are:
Working from home expenses
: you can choose between two methods: the fixed rate method or the actual cost method.
The fixed rate method allows you to claim 70¢ for each hour worked from home during the year. You do not need to keep receipts, but you must keep a record of the hours worked at home.
The actual cost method allows you to claim the costs of working from home, but taxpayers must have a dedicated room set aside for the office and remove all private use.
You cannot claim personal items like interest on a home loan or rent expenses unless you are operating a business from home.
Personal items, such as coffee machines, are not claimable even if you use them while working from home. Mobile phone and internet costs are included in the 70¢ per hour fixed rate. The ATO will be looking for taxpayers who claim these twice — for example, on their return and from their employer.
The 70¢ per hour rate does not include depreciation of work-related technology and office furniture, cleaning of the home office and repairs to these items. So these amounts can be claimed separately.
Motor vehicle expenses
: there are also two methods to work out this claim. The log book method requires you to have kept a record for 12 weeks. You then need to work out the percentage you used your car for work or business which is applied to your expenses.
The cents per kilometre method allows you to claim 88¢ for each kilometre up to 5000km of work or business travel. No receipts need to be kept for this method, but you must be able to justify the total kilometres that you have claimed.
If you use the cents per kilometre method, do not double dip by claiming additional motor vehicle expenses.
Rental properties:
make sure the expenses you claim do not include your personal costs. For example, the interest expenses must only be for the rental property and not interest from your personal home.
Also, if you own 50 per cent of the rental you can only claim 50 per cent of the expenses, even if your taxable income is higher than the other owner. If you have a holiday home you can only claim expenses for when that home was rented out, not the whole year.
Cryptocurrency:
many taxpayers are buying and selling cryptocurrency. These transactions need to be reported in your tax return when they are sold as a capital gain or capital loss.
Other forms of income:
if you earn money through the sharing or gig economies, you must include all income from these activities in your return. If you sell goods online, the tax office may consider it to be a business, and it will expect the income to be declared.
The ATO already knows a lot about your tax situation, which makes it harder than ever to cheat.
The tax office uses data matching to check information you include in your return against data provided by other parties including share registries and your health insurer. It also gathers information from the internet.
If the data doesn't match your return, or your claim is considered excessive, the ATO may contact you. You may be asked to explain why and, if your explanation is unsatisfactory, you might be audited.
Penalties of 25 per cent to 75 per cent of the tax owed may apply for falsely claiming deductions. The more dishonest the claim, the higher the penalty.
The link between what you claim and what you earn has to be real. So do not claim the cost of your Armani suit as a work uniform or your pet as a mascot for your business. Even the cost of a massage chair to relieve work stress cannot be claimed.
Dubious claims received by the tax office in recent years are many and varied. They have included Lego, school uniforms and sporting equipment purchased for kids, $9000 worth of wine bought by a wine expert while on a European holiday, for personal consumption, and a claim using receipts lodged by a doctor for an overseas conference he didn't attend.
If you make a mistake in your tax return, you can always amend it via MyTax.
The tax office will not fine you unless you did not take reasonable care, but you will have to pay back the shortfall in tax.
The due date to lodge your own return is October 31. If you are having trouble meeting this date, contact the tax office and ask for an extension.
Robert B Whait is senior lecturer in taxation law at the University of South Australia. Connie Vitale is senior lecturer tax and accounting at Western Sydney University
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Australia news LIVE: Albanese to introduce cheaper medication bill; European Union reach 15 per cent trade deal with Trump
Australia news LIVE: Albanese to introduce cheaper medication bill; European Union reach 15 per cent trade deal with Trump

The Age

time2 hours ago

  • The Age

Australia news LIVE: Albanese to introduce cheaper medication bill; European Union reach 15 per cent trade deal with Trump

Latest posts Latest posts 6.43am Britain warns on China, backs Australia By David Crowe Britain has vowed to 'fight together' with Australia if needed in flashpoints such as the Taiwan Strait, as it steps up its warnings about threats from China, including repression, espionage and hybrid attacks. UK Defence Minister John Healey said Britain and Australia would deter enemies together by being more ready to fight, in some of his most assertive remarks about the risks to global security. The declaration to the British media came days after Healey signed a $41 billion defence treaty with Australia to accelerate the construction of the AUKUS nuclear submarines, seen as essential to countering future trade and military threats. 6.37am Australians 'frosty' on Trump and want distance from US: new polling By Matthew Knott Australians are voicing a strong desire for the country to assert more independence from the United States amid Donald Trump's turbulent presidency, with most voters saying they do not blame Prime Minister Anthony Albanese for failing to secure a meeting with the US president. The latest Resolve Political Monitor survey of more than 2300 people, conducted for this masthead, found that most Australians continue to have strongly negative views of Trump six months after he re-entered the White House. Fewer than one in five Australian voters believe Trump's election was a good outcome for Australia. 6.33am What's making news today By Daniel Lo Surdo Hello and welcome to the national news live blog. My name is Daniel Lo Surdo, and I'll be helming our live coverage this morning. Here's what is making news today: The Albanese government will continue work to execute its election promises this week, with legislation to cap the cost of Pharmaceutical Benefits Scheme medicines at $25 on the agenda in the sitting second week of the new parliamentary term. Labor also plans to pass legislation to reduce student debts and enact childcare reform this week, after the respective draft laws were introduced in the first sitting week since the government's thumping election victory in May. The European Union have accepted a trade deal with US President Donald Trump that will impose a 15 per cent tariff on billions of dollars in exports, in an agreement that appears set to lift prices for American consumers and hurt sales for European exporters. The deal will also see the EU purchase $US750 billion worth of energy from US in the years ahead, in a move to reduce its reliance on Russian gas. Israel's military carried out airdrops of aid in Gaza on Sunday after Israel said it would establish humanitarian corridors for United Nations aid convoys amid international pressure over mounting reports of starvation-related deaths in Gaza. The Israeli Foreign Ministry said it would introduce 'tactical pauses' to allow for aid to be distributed, and halt activity in Muwasi, Deir al-Balah and Gaza City from 10am to 8pm every day until further notice. Australian Oscar Piastri has extended his F1 championship lead after winning the Belgian Grand Prix in a rain-interrupted race at Spa-Francorchamps overnight. Piastri started second on the grid but overtook McLaren teammate Lando Norris early in the race and held his nerve to finish atop the podium. Norris and Ferrari's Charles Leclerc joined Piastri on the dais in Belgium.

Australia news LIVE: Albanese to introduce cheaper medication bill; European Union reach 15 per cent trade deal with Trump
Australia news LIVE: Albanese to introduce cheaper medication bill; European Union reach 15 per cent trade deal with Trump

Sydney Morning Herald

time2 hours ago

  • Sydney Morning Herald

Australia news LIVE: Albanese to introduce cheaper medication bill; European Union reach 15 per cent trade deal with Trump

Latest posts Latest posts 6.43am Britain warns on China, backs Australia By David Crowe Britain has vowed to 'fight together' with Australia if needed in flashpoints such as the Taiwan Strait, as it steps up its warnings about threats from China, including repression, espionage and hybrid attacks. UK Defence Minister John Healey said Britain and Australia would deter enemies together by being more ready to fight, in some of his most assertive remarks about the risks to global security. The declaration to the British media came days after Healey signed a $41 billion defence treaty with Australia to accelerate the construction of the AUKUS nuclear submarines, seen as essential to countering future trade and military threats. 6.37am Australians 'frosty' on Trump and want distance from US: new polling By Matthew Knott Australians are voicing a strong desire for the country to assert more independence from the United States amid Donald Trump's turbulent presidency, with most voters saying they do not blame Prime Minister Anthony Albanese for failing to secure a meeting with the US president. The latest Resolve Political Monitor survey of more than 2300 people, conducted for this masthead, found that most Australians continue to have strongly negative views of Trump six months after he re-entered the White House. Fewer than one in five Australian voters believe Trump's election was a good outcome for Australia. 6.33am What's making news today By Daniel Lo Surdo Hello and welcome to the national news live blog. My name is Daniel Lo Surdo, and I'll be helming our live coverage this morning. Here's what is making news today: The Albanese government will continue work to execute its election promises this week, with legislation to cap the cost of Pharmaceutical Benefits Scheme medicines at $25 on the agenda in the sitting second week of the new parliamentary term. Labor also plans to pass legislation to reduce student debts and enact childcare reform this week, after the respective draft laws were introduced in the first sitting week since the government's thumping election victory in May. The European Union have accepted a trade deal with US President Donald Trump that will impose a 15 per cent tariff on billions of dollars in exports, in an agreement that appears set to lift prices for American consumers and hurt sales for European exporters. The deal will also see the EU purchase $US750 billion worth of energy from US in the years ahead, in a move to reduce its reliance on Russian gas. Israel's military carried out airdrops of aid in Gaza on Sunday after Israel said it would establish humanitarian corridors for United Nations aid convoys amid international pressure over mounting reports of starvation-related deaths in Gaza. The Israeli Foreign Ministry said it would introduce 'tactical pauses' to allow for aid to be distributed, and halt activity in Muwasi, Deir al-Balah and Gaza City from 10am to 8pm every day until further notice. Australian Oscar Piastri has extended his F1 championship lead after winning the Belgian Grand Prix in a rain-interrupted race at Spa-Francorchamps overnight. Piastri started second on the grid but overtook McLaren teammate Lando Norris early in the race and held his nerve to finish atop the podium. Norris and Ferrari's Charles Leclerc joined Piastri on the dais in Belgium.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store