Millions of Australians have been warned about tax shortcuts, social media hacks and promises of bigger refunds as they prepare to lodge their returns from July.
About 14 million Australians will file a return to the Australian Taxation Office for the 2025-2026 financial year.
As many begin turning their attention to tracking down receipts and important records, authorities have highlighted the red flags people should be on alert for and the areas the ATO will be putting under the microscope.
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ATO assistant commissioner Anita Challen said caution must be shown when weighing up advice from third-party sources including artificial intelligence platforms and financial influencers, or “finfluencers”, a cohort currently in the crosshairs of ASIC.
“AI can be helpful but it often draws from a broad and inconsistent range of sources, which can lead to inaccurate advice,” Challen said.
“For example, it could be drawing content about tax obligations or laws from outside of Australia or outdated sources.
“Your tax return isn’t the place for guesswork.”
Taxpayers are accountable for the information shared with the ATO and dodgy advice which promises bigger refunds can lead to significant penalties.
“A large following on TikTok or Instagram doesn’t make someone a tax expert, particularly when it comes to something as technical and fact‑specific as Australia’s tax system,” CPA Australia tax lead Jenny Wong told 7NEWS.com.au.
“Some finfluencers exaggerate what can be claimed because it grabs attention and drives clicks. That’s not responsible advice and it’s often the taxpayer who pays the price.
“Bad advice doesn’t just risk missing out on genuine entitlements, it can also land people with penalties, audits or worse.”
ATO’s tax time focus
Work-related deductions and omitted income from side hustles — think ride-share income, creator income, consulting, online selling or freelance work — will once again be in the spotlight, as will interest and rental income.
The ATO says these are areas where taxpayers are most likely to make errors.
“There is no single dramatic overhaul to individual tax returns this year, but taxpayers should be alert to a few practical developments,” H&R Block’s tax communications director Mark Chapman told 7NEWS.com.au.
“The ATO continues to sharpen its data-matching capabilities, particularly around omitted income, gig economy earnings, rental income and unusually high deduction claims.
“That means errors that may once have gone unnoticed are increasingly being detected.
“There is also ongoing focus on work-from-home claims, record-keeping and substantiation, with taxpayers needing to ensure they are using the right method and keeping adequate evidence.
“This is less a year of big legislative surprises and more a year of stronger compliance.”
Three golden rules for deductions
The “three golden rules” for claiming a deduction for a work-related expense are:
- You must have spent the money yourself and not been reimbursed;
- The expense must directly relate to earning your income;
- You must have a record (usually a receipt, invoice or logbook) to prove it.
“We understand apportioning expenses can be tricky but don’t fall into the trap of thinking if you intentionally claim a little more than you are entitled to, it’ll fly under the radar and that the ATO won’t notice,” Challen said.
What should people be doing now to prepare for tax time?
The advice for taxpayers is to start preparing by collecting receipts and records, and reviewing income sources.
“The best thing people can do right now is get organised,” Chartered Accountants ANZ tax leader Susan Franks told 7NEWS.com.au.
“Keep your paperwork, your receipts, and make tax time much easier for yourself.
“If you’re planning work‑related purchases, they need to be bought and ready for use before June 30 to be claimed this year.”
Chapman said people should look into frequently missed deductions — including tax agent fees and some work-related training — they could potentially claim back.
“Ironically, people often overclaim the wrong things and miss the legitimate deductions sitting in front of them,” he said.
With Payday Super in place from July 1, the ATO said now is also a good time for taxpayers to check their superannuation details are up to date.
Tax myth buster
Wong said it is a common misconception that people will automatically get a faster or bigger tax return the earlier they lodge their paperwork.
“Lodging early doesn’t guarantee a refund, and rushing can mean you miss legitimate deductions, especially if your work arrangements or expenses have changed over the year,” she said.
“Cost-of-living pressures could mean some people are eager to lodge their tax return as quickly as possible to access a refund, but it’s important to be patient, gather your evidence and claim everything you are entitled to using a registered tax agent.”
All information in this article is general in nature and does not take into account your personal circumstances. You should always seek independent, professional financial advice from a licensed expert before making any financial decisions.
