As the end of the financial year approaches, many of us are gearing up to tackle our tax returns. For some, it’s a time to look forward to a potential refund; for others, it’s a source of stress and confusion.
But this year, there’s a new twist in the tale: a wave of misleading tax advice sweeping across social media, thanks to so-called ‘finfluencers’—financial influencers—who are making some truly eyebrow-raising claims.
Social media is awash with self-proclaimed experts offering tips on how to maximise your tax return. Some of these ‘finfluencers’ have hundreds of thousands of followers, slick videos, and a knack for making tax time sound like a breeze.
But according to CPA Australia, one of the country’s leading accounting bodies, many of these viral tips are not just wrong—they could land you in hot water with the Australian Taxation Office (ATO).
‘If you see a social media account suggesting you can claim your dog as a legitimate work expense this tax time, it’s probably time to put down your phone,’ CPA Australia warns. While it’s true that some farmers may be able to claim working dogs as a business expense, the average city dweller working from home cannot claim their pet poodle as a ‘guard dog’ for tax purposes.
So, what are some of the most exaggerated or outright false claims doing the rounds this year? Here are a few that have caught the attention of CPA Australia and the ATO:
- Writing off your pet as a ‘guard dog’ while working from home isn’t acceptable unless you genuinely operate a business where a working dog is essential, such as sheepdogs on a farm.
- Listing a luxury designer handbag as a ‘work laptop bag’ is unlikely to pass ATO scrutiny, as deductions must be reasonable—and a $3000 tote usually won’t cut it.
- Reporting thousands of dollars in fuel expenses without keeping receipts is risky, as the ATO requires solid evidence for work-related travel.
- Trying to deduct swimwear as a work expense—like the truck driver who argued a lunchtime swim helped clear his head—doesn’t meet tax criteria and was rightly dismissed.
Jenny Wong, CPA Australia’s tax lead, says the problem is that many people assume advice from popular social media accounts is accurate and free from risk. ‘In many cases, the advice from these accounts is simply wrong. In other cases, the claims have an ounce of truth but would apply only to a very small group of workers,’ she explains.
The consequences of following dodgy advice can be severe. The ATO uses sophisticated data analytics to spot unusual or exaggerated claims. If you’re caught making a false claim, you could face hefty fines, be forced to pay back the money (with interest), or even face prosecution in extreme cases.
ATO assistant commissioner Rob Thomson offers a simple rule of thumb: if your deduction doesn’t pass the ‘pub test’—that is, if you couldn’t justify it to your mates at the local—it probably won’t pass the ATO’s scrutiny either.
Remember, to claim a work-related expense, it must:
1. Be directly related to earning your income
2. Not be a private expense (like travel to and from work, or childcare)
3. Have a record to prove it (such as a receipt or logbook)
If you’re unsure, the ATO website has a handy tool to help you check what you can and can’t claim. And if in doubt, consult a registered tax agent or accountant—preferably one who isn’t moonlighting as a social media star!
Tax time can be confusing, and it’s tempting to look for shortcuts or ‘hacks’ that promise a bigger refund. But when it comes to your tax return, if it sounds too good to be true, it probably is. The ATO is on high alert for exaggerated or bogus claims, and the penalties for getting it wrong can be steep.
Have you seen any wild tax tips online? Or do you have a question about what you can claim? Share your experiences and questions in the comments below—let’s help each other get it right this tax time!
Also read: ATO reveals major tax overhaul—simpler returns on the way
