If you’re thinking about claiming an air fryer, luxury clothing, or swimwear on your tax return, think again. The ATO is warning taxpayers to stay within the rules this year.
With the 2025 tax season approaching, the Australian Taxation Office (ATO) is reminding Australians to tread carefully when claiming work-related expenses. It’s a clear message: if it doesn’t relate directly to earning income, it won’t fly, no matter how creative the rationale.
Tax deduction examples that didn’t pass the ‘pub test’
The ATO has shared some eyebrow-raising claims that were rejected for not being directly tied to income-earning activities:
- A mechanic tried to claim an air fryer, two vacuums, a TV, and a gaming console
- A truck driver attempted to deduct swimwear purchased during transit due to hot weather
- A fashion industry manager put forward over $10,000 in luxury clothing and accessories
These items were considered personal in nature. Without a genuine connection to work-related income, these types of claims won’t make the cut.
Our tip? If in doubt, leave it out or run it by us first.
ATO’s focus areas for the 2025 tax year
The ATO has flagged several areas under scrutiny, particularly where errors are common or overclaiming is likely:
Work-related expenses
To be deductible, expenses must:
- Be directly related to earning your income
- Not be private in nature (e.g. general clothing, food, personal items)
- Be substantiated with clear records such as receipts, invoices, or logbooks
Common mistakes include claiming gym memberships, plain clothing, or personal tech with no direct link to your job.
Working from home deductions
If you work from home, you have two options for claiming deductions:
1. Fixed rate method
- Claim 70 cents per hour worked from home
- Covers utilities, internet, mobile phone, etc.
- Must keep a detailed record of actual hours (no estimates)
2. Actual cost method
- Claim exact costs of eligible items (e.g. office furniture, portion of electricity)
- Requires detailed receipts and usage records
- Higher potential deductions, but more admin
No double-dipping: If you use the fixed rate method, you cannot separately claim your mobile phone or electricity.
Multiple income sources (side hustles, gig work)
If you’re earning money outside your primary job, whether through freelancing, rideshare driving, or an online business, you must declare it. Each income stream might have its own eligible deductions, but only if they’re properly substantiated.
Don’t let creative claims lead to ATO trouble
The ATO’s message this year is simple: deductions must be honest, accurate, and relevant to your work. While the rules may seem grey at times, they’re based on one clear principle – would a reasonable person agree it’s work-related?And if you’re ever unsure, that’s where we come in. At C&N Accountants, we help clients avoid costly mistakes and maximise what they can claim ethically and confidently. Need support this tax season? Let’s chat.