Weirdest tax deductions revealed

August 2019

Would you claim the Lego you bought for your kids throughout the year as a tax deduction? One taxpayer did and it made the Australian Taxation Office's 2018-19 list of most unusual claims.

Taxpayers often get creative when it comes to tax deductions, but would you claim Lego bought for your kids? How about the cost of sports equipment, membership fees, school uniforms, or before and after school care?

The ATO has released its 2018-19 list of unusual tax deductions that are actually not eligible, but it does speak to the mindset of many Australians.

What made the list?

In addition to those mentioned above, others claimed, "the cost of raising twins," the "cost of raising three children" and simply, "New born baby expensive." Yes indeed, but the expenses, while often shocking to parents, are not deductible. 

Cars were also a favourite. The ATO says that "many" taxpayers tried to claim the full purchase price of their new cars as a tax deduction. This included the taxpayer who claimed the cost of the new car he bought for his mother as a gift. Nice gesture but still not deductible.

Medical and dental expenses also featured heavily. The most striking was the couple that claimed the cost of their dental expenses, "believing a nice smile was essential to finding a job." Medical and dental expenses in general are personal expenses and not deductible.

Also making the list was the couple who claimed the cost of their wedding reception as a tax deduction.

The cost of living expenses are generally not tax deductible

The unusual claims all came from the 'Other' deductions section of the tax return.

In order to claim an 'other' deduction, the expenses must be directly related to earning income and you need to have a receipt or record of the expense. If your expense relates to your employment, it should be claimed at the work-related expenses section of the return.

More information

Deductions are important to get right and your accountant can keep you on track about what is eligible or not based on your circumstances. Please contact us on 02 9957 4033 for more information. 

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This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.

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