What you won't get this tax time — and the claims the ATO will be watching

Australian taxpayers will have to wait until next year for a proposed deduction to come into effect.

Australian taxpayers are urged not to rush to lodge their tax claims this year. Source: AAP / Jono Searle

In brief

• The Australian Taxation Office is advising people not to rush to lodge their tax returns this year.
• The tax agency says it will be monitoring three areas where taxpayers are likely to make errors.

Australians have been warned not to file bogus working from home claims, take the advice of 'finfluencers' too seriously and not to file tax returns too quickly.

With the new financial year beginning on July 1, there's also one key tax sweetener people won't be getting this year.

In its May budget, the federal government confirmed it would move to legislate a $1,000 instant tax deduction for work-related expenses as part of cost of living relief — a measure it had announced as an election promise in 2025.

But taxpayers won't receive the tax deduction this year, as the proposed change is expected to apply to the 2026-2027 return if legislated.

Here's what to know about your tax return this year.

What the ATO will be watching this year

The ATO has stated that it will focus on areas where taxpayers are likely to make errors, including work-related deductions and expenses, as well as omitted income.

The agency also warns of misinformation and unverified advice on processing tax, urging taxpayers to think twice before following advice from third-party sources such as artificial intelligence, finfluencers and family and friends.

"There is a lot of misinformation out there, so checking it through a verified source is one of our key areas of focus this year," ATO assistant commissioner Anita Challen said.

CPA Australia's tax lead Jenny Wong warns that tax time is a peak period for scam activity, with scammers using emails, text messages and phone calls impersonating the ATO or tax agents to trick people out of personal information or money.

"If something doesn't seem right, pause and verify the source. Access official services only through the ATO website or contact your registered tax agent directly," Wong told SBS News.

"With increasingly sophisticated scams, a moment of caution can prevent significant financial scams."

Common tax mistakes warned by accountants

Gaven Ord, business and investment lead at CPA Australia, told SBS News it's important to prepare before lodging tax claims, rather than rushing.

"Cost-of-living pressures could mean some people are eager to lodge their tax return as quickly as possible this year to access a refund, but it's important to be patient, gather your receipts and evidence, then claim everything you are entitled to,” he said.

Ord also warns of another common mistake by taxpayers when filling in the forms.

"Some people go into autopilot when they do their tax returns, just cutting and pasting from their previous year's return and failing to consider any changes to their personal circumstances," he said.

"Take the time to reflect on your work-related expenses and collect your evidence before lodging."

Taxpayers can continue to claim work-related expenses as usual. The money must have been spent and not reimbursed, be directly related to earning income, and have a record of proof.

"Expenses must be relevant to your specific job, so there's no point trying to claim the cost of a laptop bag if you're a bus driver, for example," Ord said.

For taxpayers who work from home, Challen said they could claim the deduction only if they could demonstrate that they needed to work from home to fulfil their employment duties.

"So that doesn't include carrying out minimal tasks, for example, checking a few emails or taking a couple of phone calls," Challen said.

She said "the easiest way" to claim a working-from-home expense was to request a fixed rate, which allows taxpayers to claim 70 cents for every hour they work from home. The rates cover all additional expenses, including internet and electricity.

Challen said taxpayers could also opt for a cost-based approach to claim a working-from-home tax deduction, but they had to provide additional records for the costs.

Don't file your tax return too early

The ATO has asked taxpayers not to rush to lodge claims until late July, after the agency had said it had to adjust nearly 600,000 individual tax returns during the 2024-2025 financial year.

The agency also found that claims lodged before the ATO's system was able to pre-fill relevant information were more than twice as likely to need amendments.

The ATO said it corrected more than 140,000 individual tax returns last financial year, with discrepancies appearing in employment income, interest, dividends, welfare payments, Medicare levy exemptions and private health insurance.

More than 595,000 individual tax returns had to be adjusted by the ATO's data-matching program due to errors such as missing income and overstated deductions.

Challen said many taxpayers wrongly assumed that the earlier they lodge their tax returns, the faster they would receive a refund.

"Early lodgement increases the likelihood of missing information and mistakes being made, which can delay processing and require amendments," she said.

The ATO suggested people begin their tax tasks in late July, when the agency's system has pre-fill information for taxpayers, including wages, bank interest, government payments and private health insurance details.

"We recommend waiting until your income statement is tax-ready before preparing and lodging your tax return, which will vary for each taxpayer," an ATO spokesperson told SBS News.

This story was produced in collaboration with SBS Urdu.

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