The ATO has published information about some of the most unusual claims it has disallowed. For example, around 700,000 taxpayers claimed almost $2 billion of "other" expenses including non-allowable items such as dental costs, child care and even Lego sets.
Assistant Commissioner Karen Foat has said a systematic review of claims has found, and disallowed, some very unusual expenses. "These claims add up to a lot of money", she said. "If the deduction isn't directly related to earning income, we can't allow it."
"A couple of taxpayers claimed dental expenses, believing a nice smile was essential to finding a job, and was therefore deductible. It isn't!"
"Another taxpayer claimed the Lego sets they bought as gifts for their children. Unsurprisingly, this claim was disallowed."
The "other" deductions section of the tax return is for expenses incurred in earning income that don't appear elsewhere on the return – such as income protection and sickness insurance premiums. However, the ATO's review found some taxpayers were incorrectly claiming a range of private expenses such as child support payments, private school fees, health insurance costs and medical expenses, all of which are not allowable.
"Where people make genuine mistakes, we simply disallow the claim. But when people are deliberately making dishonest claims, particularly for large sums, we will disallow the claim and may impose a penalty", Ms Foat said.
Finally, the ATO reminds taxpayers that in order to claim an "other" deduction, the expenses must be directly related to earning your income, and you need to have a receipt or record of the expense. If the expense relates to your employment, it should be claimed at the "work-related expenses" section of the return.