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Important

The ATO has access to more data than you think. Every year they publish their hit list — the areas they are going to focus on. If you are not across it, you are flying blind.

It is that time of year again — tax time.

And the ATO has just released what they are targeting for 2025… and let us just say, claiming an air fryer because you like hot lunches at work is not going to cut it.

Yes, someone tried.

Actually, more than someone.

The ATO has publicly shared some of the “wild” claims they knocked back last year:

• A mechanic tried to claim an air fryer, microwave, two vacuum cleaners, a TV and a gaming console.
• A truck driver tried to claim swimwear because it was hot on the road and they went for a swim during breaks.
• A fashion industry manager tried to claim over $10,000 in luxury-branded clothing to look sharp at events.

All denied. All personal in nature.

Funny? Yes.

But also a clear warning shot.

Let us break down what the ATO is really focused on this year.

1. Work-Related Deductions Are Under the Microscope

The ATO has made it very clear: Work-related expenses must have a direct connection to earning your income.

Not a loose connection.

Not a “sort of helps”.

Not a “I use it sometimes for work”.

A close, provable link.

The Pub Test

Here is my simple filter:

If you explained your claim at the pub to someone who does not work in tax, would they say:

“Yeah, that makes sense.”

Or would they say:

“Mate… that sounds like a stretch.”

If it does not pass the pub test, it probably will not pass the ATO test.

Common Mistakes I See

• Claiming normal clothing just because you wear it to work
• Claiming travel from home to work (generally private)
• Claiming childcare (also private)
• Claiming home items that are clearly personal

The ATO’s role is to collect the correct amount of tax. They are not interested in creative writing exercises on your return.

2. The Three Big Focus Areas for 2025

The ATO has flagged three areas they see frequent errors in:

• Work-related expenses — We have covered that above. Records matter. Logic matters.
• Working from home deductions — Still heavily claimed. Still heavily reviewed.
• Declaring all income — And yes, that includes side hustles.

If you are earning income from:

• Uber or ride-sourcing
• Airtasker or other service platforms
• Selling goods online
• Renting out a room
• Freelance or consulting gigs

The ATO is expecting to see it declared.

They receive more third-party data than most people realise. Assuming “they will not notice” is not a strategy.

3. Working From Home — Know Your Method

This is one of the most-claimed deductions in Australia.

There are two main methods available (based on current ATO guidance):

Fixed Rate Method — 70 cents per hour

You can claim:

• 70 cents for every hour worked from home

This covers running costs like:

• Electricity
• Internet
• Phone usage
• Stationery

But here is the key point:

No double dipping.

If you use the fixed rate, you cannot separately claim those same items elsewhere in your return.

You still need records:

• A log of hours worked from home
• Evidence you incurred the expenses

Actual Cost Method

This is more detailed.

You must:

• Keep records of each expense
• Apportion work-related use
• Be able to justify your calculation

For some people it produces a larger deduction. For others, it is just more paperwork.

The right method depends on your circumstances — but documentation is non-negotiable either way.

4. Declare Everything — Even the “Small Stuff”

This is where many people trip up.

It is easy to think:

• “It was only a few thousand dollars.”
• “It was just a little side job.”
• “It was paid through an app.”

The ATO has data matching in place across many platforms.

Each income source can have different deduction rules. Each needs to be treated properly.

If you have multiple income streams, your tax position becomes more complex — not less.

A Real-World Example

Let us say:

• You work full time.
• You drive Uber on weekends.
• You work from home two days a week.

That means your return may include:

• Employment income
• Business or ride-sourcing income
• Working from home deductions
• Possibly motor vehicle deductions

That is four separate moving parts.

This is exactly the type of return the ATO is more likely to scrutinise — not because you are doing anything wrong, but because complexity increases risk of error.

What This Really Means

The ATO is not out to “get” people.

But they are tightening the screws on:

• Overstated deductions
• Poor record keeping
• Undeclared income

The message is simple:

• Be reasonable.
• Keep records.
• Do not get cute.

And definitely do not copy the guy who tried to claim two vacuum cleaners as a mechanic.

Practical Takeaway

Before lodging your return this year:

• Review your deductions logically
• Ask: “Is this clearly linked to earning my income?”
• Make sure you have records
• Declare all income sources
• If unsure, ask for advice before lodging

A few minutes of discipline now can save penalties, interest and stress later.

Disclaimer: This article provides general information only and does not take into account your personal circumstances. It is not financial or tax advice. You should seek independent advice from a qualified professional before making decisions about tax, legal or financial planning matters, along with loan structures or entity structure.