Chartered Accountant Timothy Quinn leads Tax & Accounting at Lawpath. 16+ years in tax advisory, specialising in startup growth and expansion. Passionate about supporting entrepreneurial clients with early-stage investment incentives, restructuring, international exit strategy planning, and more.
As the 2025 tax season approaches, the Australian Taxation Office (ATO) has released a reminder that not all work-related expense claims are created equal. In fact, some taxpayers are still trying to push the limits of what they think they can get away with, and the ATO is having none of it.
Intentionally making false or misleading statements can lead to penalties. The ATO understands that mistakes can happen, however, it is essential to know what expenses can and cannot be claimed for this EOFY.
So, what exactly can’t you claim this EOFY—and what are the strangest tax deductions the ATO has seen? In this article, we’ll walk you through the no-go zones of tax time 2025, from common mistakes to the downright bizarre. Plus, we’ve built a nifty interactive quiz to help you test your deduction smarts—see if you can spot what’s legit and what’ll land you in hot water.
Table of Contents
Why do we claim tax deductions?
Each year at tax time, many Australians look to claim work-related deductions to reduce their taxable income and potentially increase their refund. These deductions recognise that some business expenses are directly tied to earning your income, whether it’s using your own internet for remote work, purchasing tools for your trade, or travelling for work-related purposes.
By claiming legitimate deductions, you’re ensuring you only pay tax on your actual take-home earnings, not on costs you’ve had to incur just to do your job. However, the key is ensuring those claims are accurate, work-related, and adequately documented.
Outrageous deduction attempts announced by the ATO
From claiming gaming consoles to luxury clothing, the ATO has seen it all. Some of the most bizarre work-related expense claims rejected last year include:
- A mechanic who tried to deduct an air fryer, microwave, two vacuum cleaners, a TV, and gaming equipment, all of which were deemed personal, not work-related.
- A truck driver who attempted to claim swimwear, justifying it as necessary for roadside swims during hot transit stops.
- A fashion industry manager who claimed over $10,000 in designer clothes and `accessories to maintain a polished appearance at events and functions.
Claiming deductions for expenses that you incur whilst at work does not automatically grant you the right to claim them. Expenses must be directly related to work and cannot be traced back to personal interests outside of work affairs.
Expenses you can claim this EOFY
The ATO has an extensive list of business expenses you can claim this EOFY.
Expenses include:
- Costs associated with transport and travel that you incur in the course of your work. This does not include the travel expenses associated with travelling to and from work.
- Deductions for items like tools, computers, internet usage, stationery, or industry-specific gear, provided they’re used to perform your job.
- Protective clothing, uniforms, sunglasses, or other gear that’s specific to your job and not everyday wear may be deductible.
- If you work remotely, you can claim a portion of your home energy bills, internet, office furniture, or stationery, using either the fixed rate or actual cost method.
- Courses, seminars, or workshops that maintain or improve skills directly related to your current job may be deductible, but school fees for your kids are not.
- In some cases, meals or snacks bought while working overtime, or expenses tied to work functions, may be claimable.
[Insert quiz]
How to substantiate your tax deductions
Claiming deductions is one thing—proving them is another. The ATO doesn’t just take your word for it. To ensure your claims hold up under scrutiny, you’ll need to keep proper records, understand the requirements, and avoid vague justifications. Here’s how to do it right.
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What records should you keep?
To support your deductions, you must be able to show:
- Receipts or invoices with the supplier’s name, date, amount, and nature of the goods or services.
- Bank or credit card statements if a receipt isn’t available (though these may be considered lower-tier evidence).
- Work-related logs, such as diary entries for car travel, home office hours, or self-education activities.
- Letter from your employer confirming that the expense was required for your role (especially useful for unusual or industry-specific claims).
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How long should you keep your records?
The ATO requires you to keep tax-related records for at least five years from the date you lodge your return. If your return is amended or under review, the clock may reset. For depreciating assets, the record-keeping period may extend beyond five years—until the asset is fully depreciated.
Tools to help you stay organised
Managing receipts and logs can be tedious, but several tools make it easier:
- ATO myDeductions app – Free and built specifically for Australian taxpayers; great for tracking car trips, home office use, and receipt photos.
- Expensify or Xero Expenses – Ideal for small business owners or sole traders wanting integration with accounting platforms.
- Google Drive or Dropbox folders – Simple but effective for storing scanned receipts and employer letters in one place.
Tip: Label folders by financial year and deduction category to save time during lodgement.
The ATO isn’t out to trip you up—it just wants evidence that backs your claims. The more accurate and detailed your records, the smoother your tax return process will be.
Staying within the ATO’s guidelines
As tax time approaches, it’s crucial to ensure your claims are legitimate, directly work-related, and well-documented to avoid ATO penalties. If you’re unsure about what you can (and can’t) claim talk to an accountant for tailored EOFY advice or take advantage of our EOFY sale to get ongoing support, so you’re not scrambling when tax time rolls around again.
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