Millions of Australians have been cautioned against tax shortcuts, social media hacks, and promises of inflated refunds as they gear up to lodge their returns from July.
Tax time for millions
Approximately 14 million Australians will submit a return to the Australian Taxation Office (ATO) for the 2025-2026 financial year. As many begin gathering receipts and records, authorities have highlighted red flags and areas under scrutiny.
ATO assistant commissioner Anita Challen stressed caution when considering advice from third-party sources, including artificial intelligence platforms and financial influencers, or "finfluencers," currently targeted by ASIC.
"AI can be helpful but often draws from broad and inconsistent sources, leading to inaccurate advice," Challen said. "For example, it could use content about tax laws from outside Australia or outdated sources. Your tax return isn't the place for guesswork."
Taxpayers are accountable for information shared with the ATO, and dodgy advice promising bigger refunds can result in significant penalties.
"A large following on TikTok or Instagram doesn't make someone a tax expert, especially for Australia's technical tax system," CPA Australia tax lead Jenny Wong told 7NEWS.com.au. "Some finfluencers exaggerate claims to grab attention and drive clicks. That's not responsible advice, and the taxpayer often pays the price. Bad advice risks missing genuine entitlements and can lead to penalties, audits, or worse."
ATO's tax time focus
Work-related deductions and omitted income from side hustles—such as ride-share, creator income, consulting, online selling, or freelance work—will again be in the spotlight, along with interest and rental income. The ATO says these are areas where taxpayers most often 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, especially around omitted income, gig economy earnings, rental income, and unusually high deduction claims. Errors that once went unnoticed are increasingly detected. There is also focus on work-from-home claims, record-keeping, and substantiation. 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 work-related expenses are: you must have spent the money yourself and not been reimbursed; the expense must directly relate to earning your income; and you must have a record (receipt, invoice, or logbook) to prove it.
"We understand apportioning expenses can be tricky, but don't think intentionally claiming a little more than entitled will fly under the radar. The ATO will notice," Challen said.
Preparing for tax time
Taxpayers should start 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 and receipts to make tax time easier. If planning work-related purchases, they must be bought and ready for use before June 30 to be claimed this year."
Chapman advised looking into frequently missed deductions, including tax agent fees and some work-related training. "Ironically, people often overclaim the wrong things and miss legitimate deductions sitting in front of them."
With Payday Super from July 1, the ATO says it's a good time to check superannuation details are up to date.
Tax myth buster
Wong debunked the myth that lodging early guarantees a faster or bigger refund. "Lodging early doesn't guarantee a refund, and rushing can mean missing legitimate deductions, especially if work arrangements or expenses changed. Cost-of-living pressures may make people eager to lodge quickly for a refund, but it's important to be patient, gather evidence, and claim everything entitled using a registered tax agent."
All information in this article is general in nature and does not consider personal circumstances. Seek independent, professional financial advice from a licensed expert before making financial decisions.
