Last minute tax time tips - ATO says to steer clear of double dip claims

piggy bank on yellow backdrop with a note for tax time

With tax time just around the corner, it’s time to start getting prepared! 

Doing your tax return has become a bit more complicated in the last few years with a growing number of people working from home, but the ATO wants people to know that there’s no excuse for double dipping.

Last tax season saw roughly 8.4 million Aussies claiming around $19.8 billion in work-related expenses. With so much money at play, it’s important to make sure that all claims made are fair and valid.

According to Assistant Commissioner of the Australian Taxation Office, Tim Loh, “While some people make genuine mistakes, we do see people trying to gain an unfair advantage by claiming incorrect or false expenses. A mistake that we often see in tax returns is people claiming expenses twice.”

Here are some places you might not even know you could be risking a double-dip.

What is a double dip claim on your taxes?

A cheeky play on a dinner table faux pas, this is a claim on a tax return that’s already been covered elsewhere.

“You wouldn’t double dip your chip, so don’t double dip your deductions” says Mr Loh on this tax time rip-off. He might be wrong about some of our pub habits (guilty as charged on the chip front), but claiming things twice in your tax return makes you far more likely to find yourself penalised or audited.

Working from home expenses

Before you make your claims, it’s important to decide which method of tax deduction is best for your ‘WFH’ expenses. Choosing a base rate to calculate your expenses and then adding on expenses already covered in those rates could result in you being audited.

The temporary COVID-19 shortcut method has been extended to the 2021-2022 financial year. This allows you to calculate 80 cents per hour for the hours worked from home and is planned to end on the 30th of June 2022. It is designed to account for home internet, heating, cooling and office equipment depreciation, and means that these things can not be claimed on top.

If you use the regular fixed rate method for calculating your WFH expenses, you can use the rate of 52 cents per hour. This includes heating, cooling and office furnishings (desks, chairs) but does not include internet and phone expenses or the depreciation of computers - all of which can be calculated and claimed separately.

You can use the home office expenses calculator to calculate totals with these rates, or using the actual itemised costs. Whatever you choose, be sure you’ve looked at what is included - and don’t make additional claims for things that are covered.

Work-related car expenses

Like working from home, car expenses allow you to choose a method. With nearly three million people claiming car costs in their 2020-2021 tax returns, the ATO saw frequent double dipping in this area.

Should you choose the cents per kilometre method, this covers fuel expenses, maintenance, insurance, registration, repairs and decline in value. With the surge in petrol prices, this has increased from 54 cents per kilometre in previous years to 72 cents per kilometre for 2021-2022. 

With the logbook method, you will need to have kept a continuous logbook of car use for a minimum of 12 weeks as well as specific odometer readings. Using this calculation, you can’t claim the cost of the car, money borrowed to buy it, or any improvement cost. You can, however, claim fuel and oil costs.

It’s also important to be aware of what is and isn’t claimable through either of these methods. You can’t claim costs related to travel between home and your regular office or vice versa. You also can’t make claims on a car that is provided by your employer, or that you purchase via salary sacrifice.

Employer reimbursed expenses

Scored a work laptop or a sweet bit of branded kit? Have an allowance in your paycheck specifically for dry cleaning? Don’t think you’re being clever by trying to claim those expenses on your tax return.

When an item is paid for by work, it belongs on their tax return - not yours.

woman confused about taxes and tax return on yellow background

When can I do my taxes?

Double dipping might be a bad look, but there are plenty of things you are well within your rights to claim come tax time.

Australian tax season begins on the 1st of July, 2022 for the 2021-2022 financial year. To complete your tax return you will need tax records from any employers over the period, as well as statements from any relevant places: banks, insurance providers, investments, etc.

Once those come in, happy tax time!

For more everyday finance information, explore our Family Finances hub.