Are You on the ATO’s Radar This Tax Time? Here are Five High-Risk Claim Areas Likely to Attract ATO Attention

Written by Shara Cox

As tax season rolls around, the ATO is sharpening its focus on common areas where taxpayers tend to push the boundaries (sometimes unknowingly). From overstated deductions to unreported side income, here are five key areas under close scrutiny this year.

1. Work-from-Home Deductions: Don’t Double Dip 

If you’re using the fixed-rate method (70 cents per hour worked at home), you can’t claim additional deductions for things like electricity, internet, or stationery. These are already covered. Want to claim more? You’ll need to track every expense and switch to the actual cost method - records and receipts required.

2. Dodgy Work-Related Claims 

The ATO isn’t interested in your new high-end espresso machine, or new designer suit jacket, unless you can genuinely prove it’s essential to your job. To stay safe, follow the three golden rules:

·        You paid for it yourself,

·        It directly relates to your income,

·        And you have a receipt to prove it.

If it doesn’t meet all three, leave it out.

3. Income from Side Gigs 

Making extra cash on the side through ride sharing, food delivery, freelancing, or selling goods online? That income needs to be declared. If it’s regular and profit-driven, the ATO sees it as business income - even if you call it a hobby.

4. Rental Property Red Flags

To claim deductions on a rental property, it must genuinely be available for rent. That means reasonable pricing and conditions. Listing it with unrealistic restrictions or at above-market rates could jeopardise your claim.

5. Crypto Profits Are Not Invisible

Bought or sold cryptocurrency? Every transaction counts. You’ll need detailed records including dates, amounts, and associated fees. Don’t assume the ATO isn’t watching the blockchain - it is.

Need clarity on your tax return?

If you're unsure whether your deductions are legitimate or concerned about any claims you're planning to make, it's best to seek advice before you lodge.

Get in touch with our team to review your return and ensure you're compliant — while still maximising your entitlements.

Sourced from the Australia Financial Review