Yahoo Finance Lego sets, a wedding: Unusual tax claims the ATO won’t let you get away with
There have been some bizarre – and brave – claims made to the Australian Taxation Office, and they want you to know it won’t fly.
Last financial year, nearly 700,000 taxpayers tried to claim almost $2 billion in ‘other’ expenses – but they were non-allowable items like Lego sets, dental costs, or childcare.
Unfortunately, these claims will end up denied, said ATO assistant commissioner Karen Foat.
“If the deduction isn’t directly related to earning income, we can’t allow it,” she said.
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“A couple of taxpayers claimed dental expenses, believing a nice smile was essential to finding a job – and was therefore deductible. It isn’t, and their claims were disallowed.”
Yet another taxpayer tried to claim Lego sets they purchased as gifts for their children. Not surprisingly, this claim was denied too.
“Personal gifts don’t qualify, and it’s not okay to ask Australian taxpayers to subsidise presents,” Foat pointed out.
These are the top 5 ridiculous tax claims revealed by the ATO:
1. Lego sets, sports equipment
A taxpayer claimed the costs of Lego kits purchased for their children throughout the year, while others tried to claim sporting equipment and membership fees of their athletic children. These claims were denied in full.
2. Vehicles
Several taxpayers tried to claim the cost of their brand new car, which exceeded $20,000. “Purchasing a private vehicle is not an allowable deduction,” the ATO said.
3. Child support, cost of raising children
One taxpayer tried to claim “the cost of raising twins” and another attempted the “cost of raising three children”. Another actually tried to claim “new born baby expensive”.
Other attempted claims included school uniforms, before school care and school fees and expenses.
4. Medical expenses
Your dental or medical care is a private expense, and will be denied by the ATO.
5. Wedding reception
One brave taxpayer tried to claim the cost of their wedding. “We disallowed the claim in full,” the ATO stated.
What is the ‘other’ deductions section in the tax return for?
This section is reserved for expenses that you incur while earning income, such as income protection and sickness insurance premiums, that don’t slot in anywhere else on your tax return.
But the ATO has found taxpayers are trying to claim all sorts of private expenses, like child support payments, private school fees, health insurance costs, and medical expenses.
While there will be some leniency if you’ve simply made an error, the ATO will be less forgiving if you’re trying to claim something you’re not allowed to on purpose.
“When people are deliberately making dishonest claims, particularly for large sums, we will disallow the claim and may impose a penalty,” Foat said.
“We want people to understand what expenses they can claim and receive every dollar they are entitled to.
“But making incorrect claims that are personal or private take funding away from providing essential community services, and that’s not okay.”
The ATO website has more information about the penalties taxpayers may incur.
Tax return tips to claiming work expenses
Keep in mind that ‘other’ deductions must be directly related to earning income, and you have to have a receipt or record of the expense, the ATO advised.
And if the expense relates to your employment, it should be claimed at the work-related expenses section of your tax return.
Related story: What can I claim on my tax return?
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