Tax time has arrived for millions of Australians, and the ATO is better equipped than ever to detect errors in your return. With sophisticated data-matching technology and access to information from banks, digital platforms, share registries, and short-term accommodation services, the ATO can cross-reference your declared income and deductions against a wide range of third-party sources before your return is even processed.
This year, the ATO has issued a direct public warning: do not rely on unverified tax advice, particularly from artificial intelligence platforms, social media influencers, or informal tips from friends and family. Alongside that warning, the ATO has announced two specific focus areas for Tax Time 2026 that every Australian lodging a return should understand before submitting.
This blog explains exactly what the ATO has communicated publicly about its priorities this Tax Time, so you know what to check before you lodge your 2025/26 return.
The ATO’s Warning About Tax Misinformation
In April 2026, the ATO issued a public warning ahead of Tax Time, alerting Australians to the growing spread of inaccurate tax information online. ATO Assistant Commissioner Anita Challen stated that taxpayers should pause and check their tax information before acting on it, particularly when that information comes from unofficial sources.
The ATO has identified three main sources of unreliable tax advice that Australian taxpayers are acting on this year.
Artificial Intelligence Platforms
AI tools have become widely accessible and many Australians are using them for quick answers to tax questions. The ATO acknowledges that AI can be useful in some contexts but has warned specifically that AI platforms can pull information from varied and sometimes unreliable sources. The result is guidance that may not reflect current Australian tax law or your individual circumstances.
The ATO’s message is clear: “Your tax return isn’t the place for guesswork.” Acting on AI-generated tax advice without verifying it against the ATO’s own resources, or consulting a registered tax professional, carries real compliance risk.
Finfluencers and Social Media Tax Tips
A growing number of Australians are turning to financial influencers, commonly known as finfluencers, for information about tax deductions, investment strategies, and side hustle income. The ATO has specifically called out this type of content as a source of misleading information this Tax Time.
The concern is that confident-sounding social media content about refund shortcuts, little-known deductions, or ways to minimise tax often oversimplifies the law or applies general rules to situations where specific conditions must be met. What worked for someone else’s return may not be available to you based on your own role, employer arrangements, and income type.
Informal Advice from Family and Friends
Well-meaning advice from colleagues or family members who always claim a particular deduction is another source of errors the ATO is flagging. Australian tax law is complex and highly circumstance-specific. A deduction that someone else claimed in a prior year may not be available to you in 2026, particularly given recent court decisions and updated ATO guidance that have clarified what employees can and cannot deduct.
The critical point is this: regardless of where your tax advice came from, you remain responsible for the accuracy of your return. As the ATO’s Assistant Commissioner stated: “Taxpayers remain accountable for ensuring the information they or their agents provide to the ATO is accurate, whether the advice came from a friend, online sources, or if AI tools were used in its preparation.”
Tip: Verify Before You Lodge
Before acting on any tax tip, verify it against the ATO’s official resources at ato.gov.au, the ATO app, or by consulting a registered tax professional.
ATO Focus Area 1: Work-Related Deductions
Work-related expenses are the ATO’s first primary focus area for Tax Time 2026. This is one of the largest categories of deductions claimed by Australian individuals and one of the most frequently misunderstood.
To claim a work-related deduction, three conditions must all be met:
- You must have spent the money yourself and not been reimbursed by your employer
- The expense must be directly related to earning your income from work
- You must have a record such as a receipt or invoice to substantiate the claim (for claims over $300)
The ATO has highlighted two types of errors it is seeing this year: deductions that are overclaimed and expenses that have not been correctly apportioned between work and private use.
Understanding Apportionment
Apportionment is required whenever an expense has both a work-related and a private component. You can only claim the work-related portion, not the full amount of the expense.
Common examples where apportionment applies include:
- A mobile phone used for both personal calls and work calls: only the work-related percentage of the bill is deductible
- A laptop or computer used for work tasks and personal browsing: only the work-use percentage of its cost or depreciation is deductible
- A home internet connection used for both work and personal purposes: only the work-related proportion is claimable
- A car used for both work-related travel and private trips: only the kilometres driven for work purposes can be claimed
The ATO’s message this year is direct: claiming the full cost of a mixed-use expense, or rounding up the work-use percentage to a convenient number without proper records to support it, is one of the specific errors being identified in compliance reviews.
Common Work-Related Deduction Mistakes to Avoid
The ATO publishes occupation and industry specific guides setting out exactly which deductions are available for different roles. Checking the guide for your occupation before lodging is one of the most practical steps you can take, both to ensure you are claiming everything you are entitled to and to avoid claiming deductions that do not apply to your role.
Common errors in work-related deduction claims include:
- Claiming expenses that were reimbursed by your employer
- Claiming the cost of travelling between home and your regular workplace (this is a private expense, not a work deduction)
- Claiming clothing that could be worn outside of work, even if you only wear it for work
- Claiming tools, equipment, or subscriptions that are primarily for personal use
- Failing to keep receipts for individual claims over $300
Did You Know?
The ATO’s occupation guides cover hundreds of roles, from teachers and nurses to tradies and IT professionals. You may be entitled to deductions specific to your occupation that you have not claimed before. Visit the ATO occupation and industry guides page to find the guide relevant to your work.
ATO Focus Area 2: Omitted Income
Omitted income is the ATO’s second primary focus area for Tax Time 2026. This covers income that taxpayers have not declared, whether because they were unaware of the obligation to report it or because they believed it would not be detected.
The ATO’s data-matching capabilities have expanded significantly. Under the Sharing Economy Reporting Regime, digital platforms that facilitate income-earning activities are required to report payment data directly to the ATO. This information is automatically cross-referenced against lodged returns. The ATO is clear: if income has not been declared but the ATO has received it from a third party, taxpayers can expect an amended assessment.
Side Hustle and Gig Economy Income
Millions of Australians earn income through digital platforms and gig economy work in addition to their primary employment. Whether you drive for a ride-sharing service, deliver food, sell goods through an online marketplace, rent out a property through a short-term accommodation platform, or provide services through a task-based platform, that income is assessable and must be declared.
Platform operators are required to report payment data to the ATO under the Sharing Economy Reporting Regime. This means income received through ride-sharing, delivery, accommodation, and marketplace platforms is already visible to the ATO before you lodge. You can read about your obligations on the ATO’s sharing economy income page.
Cash Jobs
Income earned through cash jobs is fully assessable and must be included in your tax return regardless of whether a formal invoice was issued or payment was through a bank account. The ATO uses bank deposit data, industry benchmarking, and lifestyle analysis to identify taxpayers whose declared income appears inconsistent with their actual financial activity.
Cash income is not invisible income. If you provide services, complete work, or sell goods and receive payment in cash, that income is taxable and must be declared in your return.
Rental Income
Rental income from investment properties is fully assessable and must be declared for every dollar received. This includes short-term rental income from digital accommodation platforms. The ATO is focusing not only on whether rental income is declared but also on whether associated deductions have been correctly calculated and apportioned.
If your rental property also doubles as a holiday home that you use personally during parts of the year, the ATO has released significant new guidance in May 2026 that directly affects what you can and cannot claim. A separate blog on our website covers this new guidance in full detail.
Important: The $1,000 Standard Deduction Does Not Apply to This Year’s Return
The government’s proposed $1,000 standard deduction for work-related expenses was announced in the 2026/27 Federal Budget but applies from 1 July 2026. This means it will be available when you lodge your 2026/27 return next year. It does not apply to the 2025/26 return you are lodging now. Claims for this financial year continue to be assessed under the existing substantiation rules.
How to Check Your Return Before You Lodge
Before lodging your 2025/26 tax return, work through the following steps to reduce the risk of errors and ATO scrutiny:
- Gather documentation for all income sources, including salary, investment income, side hustle platform income, rental income, and any cash payments received
- Review your work-related deduction claims against the ATO’s occupation and industry guide for your role
- For any expense with both work and private components, calculate the work-related proportion and claim only that amount
- Confirm you have receipts and records for all individual deductions over $300
- Check your pre-fill data in myTax to cross-reference the information the ATO already holds about your income from employers, banks, and platforms
- Verify that all employer superannuation contributions are showing in your super fund, particularly as Payday Super begins from 1 July 2026
If you are uncertain about any deduction or income item, the ATO’s Tax Time 2026 guidance is the most reliable starting point.
Why a Registered Tax Agent Is Your Safest Option
A registered tax agent is legally authorised to prepare returns and provide tax advice on your behalf. Registered agents are bound by the Tax Practitioners Board’s Code of Professional Conduct and must maintain current knowledge of Australian tax law. This is a materially different standard from an AI tool, a social media post, or informal advice.
Using a registered tax agent also provides practical advantages at Tax Time:
- Extended lodgment deadlines beyond the standard 31 October deadline for self-lodgment
- Professional accountability for advice given, meaning you have recourse if incorrect advice causes a problem
- Knowledge of occupation-specific deductions, recent ATO rulings, and court decisions that affect what can and cannot be claimed in your specific situation
- Representation support and a professional intermediary if the ATO raises a query or audit
At JMB Consultants, we provide personalised tax return preparation and advice for individuals across Australia. If you would like assistance with your 2025/26 return, contact us before lodging. To find any registered tax agent, use the Tax Practitioners Board agent search.
Official Resources
The following ATO publications and tools are directly relevant to Tax Time 2026:
- ATO Tax Time 2026
- ATO Work-Related Deductions Guide
- ATO Occupation and Industry Specific Guides
- ATO Sharing Economy Income
- ATO myTax: Lodge Your Return Online
- Tax Practitioners Board: Find a Registered Tax Agent
Disclaimer: This article is intended as general information only and does not constitute legal or financial advice. The information is based on ATO guidance and public statements current as at June 2026. Tax rules and ATO priorities can change. You should seek professional advice tailored to your specific circumstances before lodging your return or taking any action.