ATO is watching tiny transactions - it could land you a shock tax bill
The Australian tax office is using AI to track even the smallest income transactions, with Aussies warned they’ll be caught for under-reporting even $50, as the tax return deadline looms.
Australia’s largest accounting body is urging Australians to lodge their DIY tax returns ahead of the looming deadline to avoid costly mistakes or penalties.
The Australian Taxation Office can impose penalties of $330 for each 28 day period the return is late, beyond the October 31 deadline.
CPA Australia said Australians must begin to get their DIY tax affairs in order, or get on the books of a tax agent to secure an extension.
“Don’t let your tax return haunt you,” CPA Australia’s Tax Lead Jenny Wong said.
We’re all busy and the deadline has crept up on us, but lodging your tax return on time is important. It’s your responsibility.
“Leaving it until the last minute comes with the risk that you cut corners, get things wrong and don’t submit your return accurately. You could receive a less favourable outcome, plus missing the deadline could summon a scary penalty from the ATO.
“Rushing to lodge your tax return can also put you at greater risk of falling for scams as scammers target people with last-minute calls to action, or promises of substantial refunds.”
Ms Wong said taxpayers should register for myID to increase online security and help reduce the risk of identify fraud.
Meanwhile influencers, OnlyFans creators and those with side hustles are being warned of ATO crackdowns.
Income from companies like Uber, OnlyFans, JusPark, and even profit from social media will all be flagged to the ATO and could land Australians with a shock tax bill if undeclared.
The tax office can now see everything earned from these sources of income, with new AI systems ready to flag thousands of Aussies who don’t declare it all.
New reporting regimes will see the Australian Taxation Office have its strongest indication yet in 2025 of individual’s sources of wealth across a dozen different types of third-parties including online marketplaces, cryptocurrency providers and share economy providers – with AI data-matching expected to flag all discrepancies.
The ATO’s new system can now see transactions as small as a $50 car space rental, a $100 Airtasker job or a weekend Airbnb rental – and match them to names, birth dates, and tax file numbers.
In 2024, a Gold Coast OnlyFans content creator revealed she owed the Australian Taxation Office a whopping $593,122.
Speaking to News Corp at the time, Annie Knight said she was shocked to receive the hefty tax bill, despite her large income.
CPA AUSTRALIA’S TOP 3 TIPS FOR FRIGHT-FREE TAX LODGEMENT:
Copy and pasting is a grave mistake
If lodging yourself through myGov, check the pre-filled information carefully and don’t simply copy and paste last year’s deductions. “Consider whether your circumstances have changed in the past 12 months and ensure all your income has been declared accurately,” said Ms Wong. “You may also find that your work expense claims will be different to what you previously submitted, especially if you’ve changed jobs.”
Don’t rely on magic – get expert help
Anyone would benefit from the expert advice of a CPA, but those with complex finances should definitely seek professional help from a tax agent. This includes taxpayers who own rental properties, crypto assets or make extra income through side hustles. “A tax agent will help you navigate the complexities of your finances, make sure everything is accurate and give you more time to lodge,” Ms Wong said. “Just make sure you’re on their books by 31 October.”
Avoid the bite of tax scams
“Scammers are like vampires – they thrive in the shadows and feed on urgency,” said Ms Wong. “Be wary of unsolicited SMS messages and emails claiming to be from the ATO, including those with hyperlinks and urgent calls to action, such as claiming you have a substantial refund to secure. Also treat unsolicited phone calls with caution. If in doubt, hang up and call the ATO directly to check the validity of the call.”
Originally published as ATO is watching tiny transactions - it could land you a shock tax bill
