Tax Services Archives - DLK Advisory

Increased instant asset write-off now a permanent feature for small business

Admin 10th September, 2026

If you’re a small business owner budgeting for new equipment or technology, certainty around the tax treatment of your assets is important. As announced in the 2026–27 Federal Budget, the government has permanently extended the $20,000 instant asset write-off for eligible small businesses. The change has now passed through Parliament and become law. Eligible small businesses can claim an immediat e deduction for eligible assets costing up to $20,000 if the asset is first used, or installed ready for use, for a taxable purpose on or after 1 July 2026.

What’s changed?

The instant asset write-off threshold has been subject to temporary extensions and changes over time, previously being extended until 30 June 2026 (without which the threshold would have dropped back to $1,000 from 1 July 2026). The new law has made the $20,000 threshold permanent. The measure is intended to encourage business investment and simplify tax planning by providing a stable framework instead of relying on year-by-year legislative extensions.

Who’s eligible?

Small businesses with an aggregated annual turnover of less than $10 million that satisfy the turnover test and choose to apply the simplified depreciation rules are eligible to use the write-off.

How does it work?

If your business is eligible, you can immediately deduct the taxable-purpose portion of the cost of an eligible depreciating asset costing less than $20,000 rather than deducting the cost over several years. The threshold applies on a per-asset basis. This means that your business may be able to claim multiple assets in the same income year, provided each asset costs less than $20,000 and all eligibility requirements are met. The asset must be first used, or installed ready for use, in the relevant income year before a tax deduction can be claimed. The write-off may also apply to the first amount included in the second element of an eligible asset’s cost after the income year in which the asset was immediately deducted under the simplified depreciation rules. The amount must be less than $20,000.

What can be claimed?

The write-off can apply to a wide range of new and second-hand depreciating assets, including: computers and laptops; office furniture and fittings; tools and equipment; eligible machinery and equipment; and some business vehicles (subject to the car limits). Only the taxable-purpose portion of an asset can be claimed. For example, where an asset is used partly for business and partly for private purposes, only the proportion used for a taxable purpose is deductible.

What if the asset costs more than $20,000?

Assets costing $20,000 or more do not qualify for the immediate deduction under the simplified depreciation rules. Instead, you must allocate the business-use portion of your asset to your small business depreciation pool, where it depreciates at 15% in the income year in which it is allocated to the pool and 30% in each following income year. Under the new measures, if the pool balance is less than $20,000 after the required year-end adjustments, your business may immediately deduct the remaining balance. You should also remember that the threshold applies to the cost of each individual asset, not to the total amount spent on multiple purchases.

Planning ahead

Investment decisions shouldn’t be driven by tax outcomes alone. Before you decide on purchasing significant business assets, consider your cash flow, financing arrangements, expected benefits to your business, and when your new asset will be first used or installed ready for use. We can help you determine whether an asset purchase aligns with your business goals and ensure you maximise the tax benefits available under the rules.

When set-and-forget convenience starts costing you

Admin 2nd September, 2026

Have you ever glanced at a renewal notice, noticed the price has crept up since last time, and simply paid up? You’re far from alone, and a fresh report from the Australian Securities and Investments Commission (ASIC) suggests this quiet acceptance of rising costs is more widespread than many of us realise.

Australia’s corporate regulator, ASIC, has recently raised concerns that consumers are being left in the dark about rising car insurance premiums. Its findings reveal that many people remain with the same insurer, don’t actively compare options, and often don’t understand the reasons for premium increases, and insurers often provide only limited explanations for premium changes. While ASIC’s review focused on motor vehicle insurance, the same “set and forget” risk can arise with other recurring household costs such as utilities, phone plans, subscriptions and memberships.

The bigger lesson beyond insurance

Think about how many financial commitments you have that may be quietly renewing year after year without a second look. Insurance policies, internet plans, phone plans, streaming subscriptions and professional memberships all tend to tick along in the background. Costs rarely jump in one dramatic leap. Instead, they inch upward, and small increases are easy to miss.

Do you know what’s changed?

One of ASIC’s key observations is that consumers tend to focus on the final price rather than the detail sitting behind a renewal notice. It’s worth pausing before paying up or letting that direct debit go through, and asking a simple question: what has changed since last year? This isn’t about becoming a full-time bargain hunter or switching providers every 12 months. It’s about understanding the product you already have, why the number on the invoice looks different from the one you paid previously, and considering whether it’s still right for you.

Have your circumstances changed?

A renewal is a good prompt to turn the mirror back on yourself. Useful questions to work through include: Is this still something you need? Does it still suit your current circumstances? Do you still understand what you’re paying for? Are the features and inclusions still relevant to how you live today? Your life a year ago may look quite different to your life now, and the product you signed up for should still match the person paying for it.

Reviews aren’t only about saving money

It’s easy to frame this kind of review as a hunt for savings, but there are deeper benefits. Reviewing recurring commitments helps you understand your cash flow, see where your money’s genuinely going, and get a clearer picture of your overall financial position. That awareness is valuable whether it leads to a change or simply confirms that everything is in order.

A useful annual habit

Consider building a simple annual review into your routine: read renewal notices properly rather than skimming the total; review recurring direct debits on your bank statements; confirm that major financial commitments still make sense; and keep your records organised so comparisons over time are easy. Periodic reviews can provide a much better understanding of your cash flow, spending commitments and broader financial position. If you’d like help reviewing the financial impact of changing costs or understanding how these recurring commitments fit into your broader tax and financial affairs, please contact our office.

What the new TPAR pre-fill means for contractors

Admin 25th August, 2026

If you’re a contractor, tax time may be a little easier this year. Pre-filled Taxable Payments Annual Report (TPAR) data has been made available for the first time.

The change means certain contractor payments reported to the ATO will automatically appear in the returns of eligible sole traders or contractors. The inclusion of pre-filled data aims to help streamline the tax return lodgment process , but it also highlights the importance of understanding your TPAR obligations and checking that pre-filled information is accurate before you lodge.

Refresher on TPAR

A TPAR is an annual reporting obligation that applies to businesses making payments to contractors or subcontractors for services that fall under the Taxable Payment Reporting System (TPRS).

Services that come under the TPRS are building and construction; cleaning; courier and road freight; information technology (IT); and security, investigation and surveillance.

The ATO collects TPAR information about contractor payments as part of its compliance activities, allowing the ATO to identify contractors who don’t meet their tax obligations, ensure they correctly report their income, and ensure businesses aren’t disadvantaged by competitors that don’t declare all of their income.

TPAR obligations for businesses engaging contractors

If your business operates in the relevant industries, you may be required to lodge a TPAR if you make payments to contractors or subcontractors for services covered by the reporting rules. Whether your business must lodge depends on its circumstances and the nature of its activities.

If your business needs to a report, the annual TPAR due date is 28 August.

Don’t forget: the ATO is no longer accepting paper TPAR lodgments. All reports must be made through electronic channels: via the ATO’s online services for businesses, individual and sole traders; using SBR-enabled software; or through a registered tax practitioner.

If your business doesn’t need to lodge a TPAR for a particular financial year, you should submit a non-lodgment advice (NLA) form.

If you run a business and you’re uncertain whether you need to lodge a TPAR, review your obligations well before the deadline. Leaving reporting until the last minute can increase the risk of errors and create issues for contractors who may be relying on that information appearing in pre-fill services later in the tax season.

What contractors need to know

The introduction of TPAR pre-fill is designed to help you, as a contractor, prepare more accurate returns by automatically including reported payment information in eligible tax returns.

However, pre-fill information should be viewed as a starting point rather than a complete record of income. Compare any pre-filled amounts against your records before lodging. Income earned from other sources may not be captured through the TPAR system and may still need to be added manually. You remain responsible for ensuring that all your assessable income is correctly reported.

Timing is important. As businesses have until 28 August to lodge their TPAR, if you lodge too early, you may find that not all payment information has pre-filled. Waiting until after that date could reduce the likelihood of needing to amend a return later.

If you’re a contractor that accounts for income on an accrual basis, be aware that TPAR information is reported on a cash basis. As a result, the amounts shown in pre-fill may not always align with your business accounting records, making it important to review any discrepancies before lodging.

Talk to us

If you run a business and are unsure of your TPAR reporting obligations, or if you’re a contractor who’s found inconsistencies between the pre-filled information and your records, talk to us before you lodge. We can help you get it right.

Already lodged your tax return? Don’t forget the review step

Admin 19th August, 2026

Many Australians have already lodged their 2025–26 tax return. For some, the process is finished. For others, additional information may arrive later, or they may realise something wasn’t included when the return was lodged. Lodging your return doesn’t necessarily mean the review process is over.

Has anything changed since you lodged?

After lodging your return, you might: receive an in come statement, dividend statement or interest summary that you hadn’t seen before; find receipts or records you thought were lost; realise that income, deductions or other information were omitted; or notice that information in your return doesn’t match your own records. These situations can arise for a range of reasons, particularly where information becomes available after a return’s been lodged.

The ATO says individuals and sole traders can request an amendment if they’ve made a mistake, forgot to include something, or had a change in circumstances after lodging. The ATO also notes that amendments can be requested online, by paper, through a registered tax agent or by letter.

Who lodged the return?

If you lodged the return yourself and you’ve identified something that may be incorrect or incomplete, it’s worth seeking advice before deciding what to do next. Sometimes an issue may affect your tax position, while in other cases no further action may be necessary.

If your tax professional lodged the return, let them know as soon as new information comes to light. Passing it on quickly means any required corrections can be considered without delay.

Is it better to wait and see?

A common instinct is to wait and see. People often discover something after lodgment and then do nothing because they aren’t sure whether it really matters. If you’ve found information that may affect your return, don’t assume it’s too minor to worry about. Gather the relevant records and seek advice. Often the biggest challenge is simply working out whether the issue is significant enough to require action. A quick conversation can usually provide clarity.

What should you do if you spot a problem?

If you think something in your lodged return may be incorrect: Gather the information that relates to the issue. Keep copies of any documents, statements or receipts. Contact your tax professional and explain what you’ve found. Avoid making assumptions about whether the issue is important or whether it can be ignored. The right approach depends on the circumstances.

The ATO says taxpayers should generally wait until their original tax return has been processed before submitting an amendment.

A tax return isn’t a once-only document. The purpose of lodging isn’t just to get the paperwork in. It’s to make sure your return reflects your actual circumstances for the year. If you’ve already lodged and something doesn’t look right, don’t panic and don’t assume it’s too late to do anything about it. Tax returns can generally be amended where mistakes are identified or additional information needs to be included after lodgment.

If you’ve discovered information that may affect your return, please contact our office. We can help you understand whether any further action may be needed and discuss the options available in your particular circumstances.

Division 296 tax on large super balances applies from 1 July 2026: are you ready?

Admin 4th August, 2026

If your total superannuation balance is above $3 million, a new layer of tax may apply to certain earnings attributable to the portion above that threshold. Division (Div) 296 tax applies from the 2026–27 income year, with assessments expected after the relevant earnings information has been reported to the ATO.

What is Division 296 tax?

Div 296 tax is levied directly on the individual and is separate from personal income tax and superannuation fund tax. The ATO issues the assessment, and payment is generally due within 84 days of the notice. Div 296 tax is in addition to the (up to) 15% tax that super funds pay on fund earnings in the accumulation phase.

From 2026–27, Div 296 tax applies to you if you have a large total superannuation balance (TSB) as follows: TSB up to $3 million: no Div 296 tax; TSB above $3 million: 15% Div 296 tax on earnings attributable to super balances over $3 million; and TSB above $10 million: a further 10% Div 296 tax on earnings attributable to super balances over $10 million. These thresholds are indexed to the Consumer Price Index. The $3 million threshold is indexed in $150,000 increments and the $10 million threshold in $500,000 increments. Unlike the tax on earnings paid by super funds, Div 296 tax applies to large super balances in the retirement phase as well as the accumulation phase.

Who is affected?

You may be liable for Div 296 tax if your total superannuation balance just before the start of the year, or at year end, is above $3 million and your total superannuation earnings for the year are greater than nil (although for the first year of this new tax the ATO will only look at your TSB on 30 June 2027). Your TSB generally includes Australian super interests in APRA-regulated funds, SMSFs and relevant public sector schemes, subject to valuation rules and exclusions. Foreign super interests are excluded. Certain individuals are excluded, including child recipients of a super income stream and individuals for whom a structured settlement contribution has been made in the relevant income year or any earlier income year.

How is it worked out?

There are three broad steps: your super fund calculates its Div 296 fund earnings for the whole fund for the year; the fund attributes a share of those earnings to your interest in the fund and reports the amount to the ATO; and the ATO applies a formula to work out the proportion of your TSB above each threshold and calculates the tax. Div 296 fund earnings for APRA-regulated superannuation funds are attributed by the fund trustee on a fair and reasonable basis. However, small funds, including SMSFs, must use a specific formula to calculate the member’s share of earnings, based on the average value of their interest in the fund over the year. Trustees of defined benefit and certain other superannuation interests that don’t have an account balance attributable to the beneficiary (eg lifetime income streams) use an alternative method to attribute your earnings that’s more appropriate for those particular types of superannuation interests.

Paying the tax

You can pay Div 296 tax personally, elect to release the amount from your super, or use a combination. If electing release, your application generally must be lodged within 60 days of the assessment notice. Tax attributable to a defined benefit interest is generally deferred until benefits become payable.

Next steps

Div 296 is complex, particularly for members with SMSFs, defined benefit interests or a mix of accumulation and pension accounts. Please contact our office to review your position and plan ahead.

How financially resilient is your business?

Admin 28th July, 2026

If revenue suddenly declined or a large customer stopped buying, what would happen to your business?

For many businesses, the answer isn’t obvious. Revenue may be strong, customers may be plentiful and everyday operations may appear healthy, but financial resilience is often tested when something unexpected occurs. A delayed payment, rising costs or a temporary decline in sales can place pressure on cash flow and financial commitments.

Understanding your business’s exposure to these types of events can provide valuable insights into your business’s financial position. While every business is different, several financial indicators can signal how resilient your business may be when conditions become more challenging.

How predictable is your revenue?

How much revenue your business generates is only part of the picture. Revenue consistency can be just as important! Some businesses rely on recurring income, and others depend more on project-based work, seasonal demand or one-off sales. Neither is inherently better, but understanding your own revenue drivers can help identify potential pressure points.

It can also be useful to consider how widely revenue is spread across your customer base. If a significant proportion of income comes from just a few customers, changes in customer demand, payment timing or business relationships may affect cash flow more than if revenue comes from a broader mix of clients. Discussing revenue trends with your tax professional or financial adviser may also highlight areas of concentration or dependence that’re easily missed day-to-day.

Revenue and profit aren’t the same

Strong sales figures don’t always translate into strong financial performance. Rising operating costs, narrower margins and changing market conditions can all affect profitability. Your business may be generating more revenue than ever while retaining less profit than expected.

Regularly reviewing profit and loss reports alongside cash flow information can provide a more complete picture of business performance, and your tax professional can help provide context about what the numbers suggest for your business.

Are your records in shape?

Accurate financial records do more than just help meet your tax obligations. Maintaining up-to-date information on income, expenses and cash flow makes it easier to understand your business’s performance and make informed decisions. Clear records also support discussions with your accountant, adviser or lender about business performance and cash flow.

For sole traders and family businesses in particular, maintaining a clear separation between business and personal finances supports a clearer view of profitability and cash flow and makes it easier to understand where business funds are used.

Could you absorb a setback?

Most businesses face challenges at some point. Equipment may need replacing, a major customer may pay later than expected, or demand may temporarily decline. Financial resilience isn’t about predicting every possible challenge. Rather, it’s about understanding whether the business has sufficient capacity to manage periods of disruption without creating excessive pressure on everyday operations.

Having cash reserves, reliable financial information and a clear understanding of upcoming commitments offers you greater flexibility when circumstances change.

Beyond today’s numbers

Assessing financial resilience doesn’t require a major overhaul. It starts with understanding how your business generates revenue, how dependent it is on particular customers, and whether your financial information gives a clear picture of performance.

Even if you have no plans to sell, expand or make significant changes, understanding these factors can help identify both financial strengths and areas of potential risk. The goal isn’t to eliminate uncertainty, but to better understand potential risks before they become more significant.

If you’d like help reviewing these areas, contact our office. We can help assess the financial indicators that may affect your business’s resilience and long-term sustainability.

Do you need to declare foreign income in your tax return?

Admin 22nd July, 2026

Have you retired to Australia with a pension from overseas, worked overseas for part of the year, or received income from investments held in another country? If so, it’s worth checking how that income needs to be reported in your Australian tax return.

As a starting point, if you’re an Australian resident for tax purposes, you generally need to declare income you receive from anywhere in the world. This is often referred to as declaring your worldwide income.

Foreign pensions and annuities
Most foreign pensions and annuities are taxable in Australia, even if tax has already been withheld overseas. However, the tax treatment can vary depending on the type of pension and whether Australia has a tax treaty with the other country. In some cases, you may be entitled to reduce the taxable amount.

For example, some foreign pensions have an undeducted purchase price (UPP). Broadly, this reflects personal contributions you’ve made towards the pension or annuity, with part of the pension treated as a return of those contributions.

There are specific rules for some overseas pensions. For example, if you receive a UK State Pension, you may be entitled to a UPP deduction. For a category A pension or category B widow’s pension, the ATO says the deduction can be calculated as 8% of the UK State Pension amount, converted to Australian dollars.

You may also be able to claim a foreign income tax offset if foreign tax has been paid on income that’s also taxable in Australia. This helps reduce the risk of being taxed twice on the same income.

Foreign income, deductions and foreign tax paid must generally be converted into Australian dollars.

Foreign employment income
If you’ve worked overseas, your employment income will often still need to be reported in Australia. Foreign income can also include payments from overseas platforms, such as income received by content creators or freelancers, although the way it’s reported depends on what the payment is for.

Some foreign employment income may be exempt from Australian tax, but only in limited circumstances. These rules are specific and can depend on the type of work, the length of overseas service, the employer and the country involved.

Why this is worth checking
Foreign income mistakes can be costly. If a tax return contains a false or misleading statement that results in a tax shortfall, penalties may apply. The base penalty can be 25%, 50% or 75% of the shortfall amount, depending on whether the issue involved a failure to take reasonable care, recklessness or intentional disregard of the law. Interest charges may also apply.

If you realise something’s been left out or reported incorrectly, it’s usually better to deal with it early. Voluntary disclosure may reduce any penalty.

Where to from here?
Foreign income can involve residency, tax treaties, offsets, exemptions, pension rules and currency conversion. If you receive money from overseas, we can help you get your tax return right by working out what needs to be declared and how the rules apply to your circumstances.

Small business tax time made simpler

Admin 15th July, 2026

Tax time has a habit of sneaking up when you’re focused on running your business, but doing a little groundwork can save stress, reduce the risk of errors and help you check whether any concessions are available. With tax time for the 2025–2026 income year now here, it’s a good time to check your records, review your deductions and speak with your adviser about any changes that may affect your business.

Get your online access sorted

Before you lodge, make sure your digital access and adviser authorisations are in order. This may include checking that your business can access online tax and super services, confirming that the right people are authorised to act for the business, and ensuring your tax professional can access the information they need. Sorting this out early can help avoid delays when lodgment deadlines approach.

Report all income and separate the personal stuff

One of the simplest ways to avoid problems at tax time is to make sure all business income is captured, including cash payments and non-monetary benefits such as goods or services received for your work. Keeping business and personal spending separate will also make life easier. If you’ve used business money for personal expenses, keep good records separating business and personal spending to help prevent issues later.

Practical tests for deductions

When considering tax deductions, keep these three tests in mind: the expense must relate to your business, not private use; if the expense mixes business and private use, only the business portion is claimable; and you need records or receipts to substantiate your claim. There’s also an important change for interest charges. General interest charge and shortfall interest charge incurred on or after 1 July 2025 are no longer deductible. Amounts incurred before 1 July 2025 may still be deductible for the 2024–2025 and earlier income years, depending on the circumstances.

Concessions worth checking

Don’t overlook the concessions available to eligible small businesses, including simplified depreciation rules, immediate deductions for prepaid expenses, and the instant asset write-off. For example, businesses with aggregated annual turnover of less than $10 million that use the simplified depreciation rules may be able to immediately deduct the business-use portion of eligible assets costing less than $20,000, provided the assets are first used or installed ready for use between 1 July 2025 and 30 June 2026.

Payday super’s here

Payday super started on 1 July 2026. Employers now need to pay super guarantee for each payday, with contributions generally required to be received by employees’ super funds within seven business days after payday. Super guarantee is now calculated using the new concept of qualifying earnings, so check your payroll, STP reporting and super payment processes are up to date.

Looking ahead

The ATO also has practical small business tax time resources, including its 2026 Tax Time toolkit for small business, with guidance on common issues such as deductions, record keeping, business and private expenses, and changes for the new income year. Reviewing these can help you identify questions and opportunities to discuss with your tax professional before lodging. Every business is different, and the right approach depends on your circumstances. Please contact our office to discuss how these tax time obligations, concessions and new changes apply to your business. We can help identify issues early, confirm your eligibility for concessions and ensure your return reflects your situation correctly.

Why your super insurance might not cover what you expect

Admin 1st July, 2026

If you have a superannuation account, there’s a reasonable chance you also hold life insurance through it – possibly without realising. Almost 10 million superannuation accounts have insurance attached to them, yet many members can’t say what they’re covered for, how much it costs or whether it actually suits their needs. Before assuming your default cover has you sorted, it’s worth unpacking some common misconceptions.

Misconception 1: “Everyone gets cover automatically”
Insurance through super doesn’t start automatically if you’re a new member aged under 25 or your balance is under $6,000, unless you contact your fund and ask for it, or you work in a dangerous job where your fund gives you automatic cover. If you’re younger or just starting out, you may have no safety net at all unless you opt in.

Misconception 2: “Default cover will be enough”
Default cover is a starting point, not a tailored solution. In particular: default cover may be lower than, or different from, cover available outside super; eligibility rules and exclusions can apply; and cover can stop if your account becomes inactive, your balance is too low, you change funds (unless arrangements are made to transfer or replace it) or you reach an age limit. When reviewing your insurance, check whether there are exclusions or whether you’re paying a loading – this is a percentage increase on the standard premium charged to higher-risk people such as those with a high-risk job, a pre-existing medical condition, or those classified as smokers. If your fund has classified you incorrectly, you may be paying more than necessary.

Misconception 3: “My cover follows me when I switch funds”
Often, cover won’t follow you. If you switch superannuation funds, your insurance policy may not be portable, meaning the cover you had can lapse once you’re no longer a member. Some funds allow you to transfer your policy to personal ownership, but this may require health checks and the insurer could charge more to continue the cover. Consolidating accounts can also unintentionally cancel valuable cover, so always check before you act.

Misconception 4: “If I stop contributing, nothing changes”
Cover can change if your account isn’t active. By law, super funds cancel insurance on accounts with no contributions for at least 16 months. Some funds have their own rules and cancel insurance if your balance is too low. Your fund will typically attempt to notify you before changes happen, so it’s important to keep your contact details updated.

Misconception 5: “More accounts means more protection”
Holding multiple super accounts may simply mean multiple premiums quietly draining your retirement savings. If you have more than one super account, you may be paying premiums on more than one insurance policy, which reduces your retirement savings. Claim outcomes can vary between policies, and benefits aren’t always cumulative. Consider whether you need more than one policy, or whether you can get cover through one fund.

Misconception 6: “It’s always the cheapest option”
Premiums may be lower because super funds buy cover in bulk, but that doesn’t always translate to the best value. Cover may not be enough, or may change over time, and it also may not be cheaper than insurance you can buy elsewhere.

Where to from here?
Superannuation and insurance can be complex. Before you assume your default cover’s doing the job, speak with your professional adviser to review your policy, premiums and any gaps, so you know exactly what you’re paying for and whether it still fits your circumstances.

Tax hacks, half-truths and what the ATO’s watching

Admin 23rd June, 2026

Scrolling social media for a quick tax win? You’re not alone, but you may be heading for trouble. With the end of the financial year approaching, the ATO has issued a clear warning: incorrect claims are firmly on its radar this tax time, and it has outlined the key areas it’ll be watching when returns start landing.

The misinformation problem

The ATO is urging the community to be wary of incorrect or misleading information, particularly claims promising bigger refunds, shortcuts or hacks. A lot of the bad advice doing the rounds is coming from third-party sources: AI tools, social media “finfluencers”, and even well-meaning family and friends, who may unintentionally pass on information that simply doesn’t apply to your circumstances.

ATO Assistant Commissioner Anita Challen has cautioned taxpayers to be especially careful with information drawn from AI platforms, noting, “AI can be helpful, but it often draws from a broad and inconsistent range of sources, which can lead to inaccurate advice”.

The key is, you remain responsible for what’s on your return. Taxpayers are accountable for ensuring the information they or their agents give the ATO is accurate, regardless of whether it came from a mate, a website or a chatbot. Penalties and interest can apply where claims can’t be substantiated.

Focus area 1: work-related expenses

Overclaimed work-related deductions are once again under the microscope. As Ms Challen put it, “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”.

Every work-related claim must meet three tests: the expense must directly relate to earning your income; you must have paid for it yourself and not been reimbursed; and you must have a record, such as a receipt, invoice or logbook, to back it up.

If you work from home, the fixed rate method lets you claim 70 cents for every hour worked from home, which already covers running costs such as internet, phone usage, electricity and stationery. A common mistake is “double-dipping” – using the fixed rate and then separately claiming items it already includes.

Keeping a clear record of your hours worked from home throughout the year will make this far easier to substantiate. Ms Challen has indicated that taxpayers who think they’ve overclaimed in previous years should lodge an amendment, or speak to their tax professional about amending prior year claims before the ATO comes knocking.

Focus area 2: omitted income

The ATO is also reminding taxpayers to declare all sources of income on their return, including side-hustles, cash jobs, interest and rental income. With extensive data matching now in place across banks, sharing economy platforms and property managers, undeclared income is far more visible to the ATO than many people realise.

The flip side is that legitimate deductions are often broader than expected. The ATO’s occupation and industry specific guides – or a quick chat with a registered tax professional – can help you identify everything you’re properly entitled to claim.

Speak to us before you lodge

A dodgy tip from TikTok or an AI chatbot can quickly turn into an ATO review, an amended assessment or worse. Before you lodge this year, please contact our office. We’ll help you claim everything you’re properly entitled to, and keep you well clear of the ATO’s compliance radar.