‘Energy drinks’: Wild tax claim trend exposed
As we approach another tax deadline, cheeky Aussies have been sharing the rogue claims they’ve made.
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Cheeky Australians have revealed the wild things they’ve claimed on tax, exposing quite the rogue financial trend.
Tax is back on everyone’s mind as the income tax return deadline looms, with Aussies having until October 31 to file to avoid potential late fees of up to $330.
The penalty could continue to increase by $330 every 28 days beyond the deadline, with a maximum fine of $1650.
Accounting software MYOB took to the streets of Melbourne to ask people what the “craziest thing” they’ve ever claimed on tax is, with Aussies able to claim $300 worth of work-related expenses without a receipt.
One person admitted they claimed 90 per cent of their laptop before adding:“I probably shouldn’t say that out loud”.
Someone else grinned and said: “Nothing, I’m a law-abiding citizen”.
One man said he’d claimed “energy drinks” on his tax return, while another said she once claimed some boots on tax for a job that she “hated”.
Someone else admitted they’d claimed a “nice pair of shoes” on tax.
Further afield online, there’s a popular thread on Reddit where accountants have shared the “strangest” expenses they’ve been asked to write off at tax time.
One anonymous accountant kicked off the thread by complaining that they had a client who is a dentist who wanted to claim $3000 on dog grooming and justified it by saying his dog was security for his business.
Another fed-up accountant said they had a client who tried to write off a subscription to a dating website as “office supplies”.
One numbers expert said a construction client renovated his home and then tried to write it off as marketing because he could “apparently show potential clients the great work he did”.
One whinged their own uncle had tried to write off $30,000 on a hot tub as he bought it because his chiropractor said he had a bad back, and another said they’d experienced clients trying to write off strip clubs.
Someone else shared a client had to tried to write-off a swingers cruise as a work travel expense.
One accountant revealed that he had a client who added another private bathroom to his home, which he tried to claim on tax.
When the tax agent questioned him about it, he simply said: “Because it is my office bathroom, and that is where I take care of business.”
Mark Chapman, the director of Tax Communications for H & R Block Australia said that there are some weird and wacky things you can claim on your return.
He explained there are circumstances when where a dog can be considered deductible.
“If your business uses a guard dog to keep your premises secure, a dog is indeed deductible,” he explained.
“It’s regarded as a capital asset of the business and you can claim an immediate deduction for the whole cost using the very generous temporary full expensing tax break.
“Obviously, it needs to be a dog suitable for the purpose; a poodle is unlikely to cut it. The same logic applies to dogs used on a farm, such as a sheep dog.”
Mr Chapman said sex toys can also be considered tax deductible if they are considered “tools you use in your trade”.
“Depending on what your trade is, your tools could be very different to the hammers, spanners and drills usually claimed. If you work in the adult industry, you could be looking at a deduction for sex toys, lube and all manner of accessories,” he explained.
“You can only claim the business use element of course; if you use them in your personal activities, forget the tax deduction.”
Artwork can also be considered tax deductible depending on your business. It just needs to be for the office not for home.
“Most offices these days have an array of pretty pictures dotted about the place, often in customer focused spaces like reception areas and meeting rooms. Using the temporary full expensing tax break, you could be looking at an immediate tax deduction for your business for that fine canvas you’ve had your eye on,” he said.
“Just make sure it really is used in your business. If the ATO finds out that the picture you claimed was in your office reception area is really hanging in your lounge room at home, your business will lose the deduction and end up paying more tax plus some interest and penalties.”
Mr Chapman said things like pool tables, Xboxes, television sets and even ping-pong tables can be a write-off.
“Again, provided they are used in a business context (perhaps as part of a communal recreation room in a factory or office), they should be deductible. If you just plan to put them in your own rumpus room at home however, forget it,” he said.
Financial comparison website Finder has found that 10 per cent of Australians have admitted to lying on their tax returns.
The research found five per cent made more deductions than they should have, while three per cent didn’t report overseas income.
The younger generations are more prone to lying on their tax return, with 17 per cent of Gen Z and 15 per cent of Gen Y admitting to being untruthful about their finances, compared to Gen X and baby boomers, both five per cent.
Financial expert Gram Cooke told news.com.au that fibbing on your tax return is becoming an increasing issue.
“Tax filing discrepancies are becoming an issue that many Australians may not fully appreciate the seriousness of. These might seem like minor adjustments, but they can lead to major repercussions if flagged by the ATO,” he said.
Mr Cooke said seeing the younger generations more relaxed about their returns was interesting.
“This could reflect a lack of education or understanding around tax laws, or it might be that they feel more pressure to reduce their tax bills in the face of rising living costs,” he said.
Mr Cooke said that it is best to seek professional guidance rather than guess if you’re confused or have a complicated tax situation.
To claim any work-related expense you must have spent the money yourself and not been reimbursed.
The expense must be directly related to earning your income and you need a record of it, if you’re claiming expenses over $300.
If you’re total work expenses are under $300 you may not need a receipt, but you must be able to prove that you spent the money, and have a reasonable explanation on how you calculated the amount of your claim,
Originally published as ‘Energy drinks’: Wild tax claim trend exposed
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