The Australian Taxation Office (ATO) has revealed some of the most unusual claims it disallowed last financial year.
Nearly 700,000 taxpayers claimed almost $2 billion of 'other' expenses including non-allowable items.
Assistant Commissioner Karen Foat said a systematic review of claims found, and knocked back, some very unusual expenses.
"These claims add up to a lot of money. 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. Another taxpayer claimed the Lego sets they bought as gifts for their children. Unsurprisingly, this claim was disallowed. Personal gifts don't qualify, and it's not OK to ask Australian taxpayers to subsidise presents." The 'Other' deductions section of the tax return is for expenses incurred in earning income that don't appear elsewhere on the return - such as income protection and sickness insurance premiums. But the ATO review found some taxpayers were incorrectly claiming 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. 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 OK," Ms Foat said.
To claim an 'other' deduction, the expenses must be directly related to earning income and you must have a receipt or record of the expense. If your expense relates to your employment, it should be claimed at the work-related expenses section of the return.
- Learn more about what deductions you can claim at tax time, or indeed the penalties for making false or misleading statements, at ato.gov.au
- The ATO myDeductions app can also help keep your expense and income records in one place.
Top Five outrageous claims
Lego sets
One taxpayer claimed the cost of the children's Lego kits purchased throughout the year. Others claimed for sporting equipment of membership fees for their child athletes. These claims were disallowed.
Vehicles
Many taxpayers tried to claim the purchase of a brand new car. These claims, in excess of $20,000 each, were disallowed as purchasing a private vehicle is not an allowable deduction. One particularly charitable taxpayer tried to claim for a car purchased as a gift for their mother. The ATO appreciated the sentiment but disallowed the claim.
Raising children/child support
One taxpayer made a claim for 'the cost of raising twins', while another claimed for the 'cost of raising three children'. Another was obviously shocked at the cost of having children, simply stating 'Newborn baby expensive' when making their claim. Other taxpayers claimed school uniforms, before school care, and school fees and expenses, and these claims were disallowed.
Medical expenses
Many taxpayers used 'other deductions' to claim for dental or medical care. Unfortunately, these expenses are not a deduction as they are a private expense, and the claims were disallowed.
Wedding reception
One taxpayer decided to claim the cost of their wedding reception. The ATO disallowed the claim.