Scrolling social media for a quick tax win?
You’re not alone, but you may be heading for trouble. With the end of the financial year approaching, the ATO has issued a clear warning: incorrect claims are firmly on its radar this tax time, and it has outlined the key areas it’ll be watching when returns start landing.
The misinformation problem
The ATO is urging the community to be wary of incorrect or misleading information, particularly claims promising bigger refunds, shortcuts or hacks. A lot of the bad advice doing the rounds is coming from third-party sources: AI tools, social media “finfluencers”, and even well-meaning family and friends, who may unintentionally pass on information that simply doesn’t apply to your circumstances. ATO Assistant Commissioner Anita Challen has cautioned taxpayers to be especially careful with information drawn from AI platforms, noting, “AI can be helpful, but it often draws from a broad and inconsistent range of sources, which can lead to inaccurate advice”. The key is, you remain responsible for what’s on your return. Taxpayers are accountable for ensuring the information they or their agents give the ATO is accurate, regardless of whether it came from a mate, a website or a chatbot. Penalties and interest can apply where claims can’t be substantiated.
Focus area 1: work-related expenses
Overclaimed work-related deductions are once again under the microscope. As Ms Challen put it, “don’t fall into the trap of thinking if you intentionally claim a little more than you are entitled to, it’ll fly under the radar and that the ATO won’t notice”. Every work-related claim must meet three tests: the expense must directly relate to earning your income; you must have paid for it yourself and not been reimbursed; and you must have a record, such as a receipt, invoice or logbook, to back it up. If you work from home, the fixed rate method lets you claim 70 cents for every hour worked from home, which already covers running costs such as internet, phone usage, electricity and stationery. A common mistake is “double-dipping” – using the fixed rate and then separately claiming items it already includes. Keeping a clear record of your hours worked from home throughout the year will make this far easier to substantiate. Ms Challen has indicated that taxpayers who think they’ve overclaimed in previous years should lodge an amendment, or speak to their tax professional about amending prior year claims before the ATO comes knocking.
Focus area 2: omitted income
The ATO is also reminding taxpayers to declare all sources of income on their return, including side-hustles, cash jobs, interest and rental income. With extensive data matching now in place across banks, sharing economy platforms and property managers, undeclared income is far more visible to the ATO than many people realise. The flip side is that legitimate deductions are often broader than expected. The ATO’s occupation and industry specific guides – or a quick chat with a registered tax professional – can help you identify everything you’re properly entitled to claim. Our business and tax compliance services include personal tax return preparation, so you can lodge with confidence knowing every legitimate deduction has been captured correctly.
Speak to us before you lodge A dodgy tip from TikTok or an AI chatbot can quickly turn into an ATO review, an amended assessment or worse. Before you lodge this year, please contact our office. We’ll help you claim everything you’re properly entitled to, and keep you well clear of the ATO’s compliance radar.
Speak to one of our accountants if you have any questions about the changes in tax for 2026.
Frequently asked questions
Can I trust tax advice I find on social media or from AI tools?
Not without checking it carefully. While some content may be broadly accurate, advice from finfluencers, AI platforms or even well-meaning friends often doesn’t account for your specific circumstances. The ATO has flagged this as a growing concern, and importantly, you remain responsible for the accuracy of your tax return regardless of where the advice came from.
What are the three tests a work-related expense must pass to be deductible?
To claim a work-related expense, you must be able to show that:
(1) the expense directly relates to earning your income;
(2) you paid for it yourself and weren’t reimbursed; and
(3) you have documentation to support it, such as a receipt, invoice or logbook.
What does the working from home fixed rate cover and what can’t I claim on top of it?
The fixed rate of 70 cents per hour already covers running costs such as electricity, internet, phone usage and stationery. If you use this method, you can’t separately claim those same items doing so is considered “double-dipping” and is something the ATO actively looks for.
Do I need to declare income from side-hustles or cash work?
Yes. All income including side-hustles, cash jobs, interest and rental income must be declared. The ATO uses extensive data matching across banks, sharing economy platforms and property managers, so undeclared income is far more visible than many people realise.
What if I think I’ve overclaimed in a previous tax year?
Don’t wait for the ATO to find it. You can lodge an amendment to correct a prior year return, or speak with a registered tax professional about doing so. Addressing it proactively is far better than facing penalties and interest down the track.
How do I know what deductions I’m actually entitled to?
A good starting point is the ATO’s occupation and industry-specific guides, which outline common deductions for your type of work. Better still, speak with a registered tax agent who can review your situation and make sure you’re claiming everything you’re legitimately entitled to without overstepping.
