The Australian Taxation Office has issued a short list of failed claims in tax returns, explaining that even the most creative claims would not qualify unless they were directly related to earning income.
Assistant Taxation Commissioner Karen Foat said nearly 700,000 taxpayers claimed almost $2 billion of ‘other’ expenses last year including non-allowable items such as dental costs, child care, and even Lego sets.
“These claims add up to a lot of money,” Ms Foat said.
“If the deduction isn’t directly related to earning income, we can’t allow it.”
She said 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.”
She said another taxpayer claimed the Lego sets they bought as gifts for their children.
“Personal gifts don’t qualify, and it’s not okay to ask Australian taxpayers to subsidise presents.”
Ms Foat said the ATO review found that some taxpayers were incorrectly claiming a range of private expenses such as child support payments, private school fees, health insurance costs and medical expenses, all of which were not allowable.
“Where people make genuine mistakes, we simply disallow the claim, but when people are deliberately making dishonest claims, particularly for large sums, we will disallow the claim and may impose a penalty,” she said.
“Expenses must be directly related to earning income and you need to have a receipt or record of the expense.”
She said that among the more creative claims were the purchase of a new car for private use; as a gift for someone’s mother; the cost of raising twins; and the cost of a wedding reception.
