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Australia : No smiles as dental expenses rejected.

The Australian Taxation Office (ATO) has published some of the most unusual claims that they disallowed last financial year.

Nearly 700,000 taxpayers claimed almost $2 billion of other expenses including non-allowable items such as dental costs, child care, and even Lego sets.

Assistant Commissioner Karen Foat said that a systematic review of claims had found, and disallowed, some very unusual expenses. These claims add up to a lot of money. If the deduction isnt directly related to earning income, we cant allow it.

A couple of taxpayers claimed dental expenses, believing a nice smile was essential to finding a job and was therefore deductible. It isnt and their claims were disallowed.

Another taxpayer claimed the Lego sets they bought as gifts for their children. Unsurprisingly, this claim was disallowed. Personal gifts dont qualify, and its not okay to ask Australian taxpayers to subsidise presents.

Other deductions section of the tax return is for expenses incurred in earning income that dont appear elsewhere on the return such as income protection and sickness insurance premiums. However, the ATO review found that some taxpayers were incorrectly claiming a range of private expenses such as child support payments, private school fees, health insurance costs and medical expenses, all of which are not allowable.

Where people make genuine mistakes, we simply disallow the claim. But when people are deliberately making dishonest claims, particularly for large sums, we will disallow the claim and may impose a penalty, Ms Foat said.

We want people to understand what expenses they can claim and receive every dollar they are entitled to. But making incorrect claims that are personal or private take funding away from providing essential community services, and thats not ok.

Remember, 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.

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Publication:Mena Report
Date:Jul 31, 2019
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