The importance of validating your deductions

The Australian Taxation Office (ATO) are continuing to invest more time in data matching and using the electronic resources they have available to confirm that tax declarations are valid. The importance of validating your tax deductions and having sufficient paperwork in place is becoming increasingly important.

Nowadays, everything is filed electronically which means government agencies are more easily able to access and share information with each other.

In relation to your taxes, this means the ATO have electronic access to such things as the details of your salary, the interest earned from your bank, dividends received from companies listed on the Australian stock exchange, pensions paid from centrelink etc.

As tax agents, we’re able to access the ATO pre-fill reports for our individual clients. Recently, we’ve noted that the ATO are making communications like the example below on their pre-fill reports.

Deductions reported in 2015-16

“Your client’s work-related expenses for 2015-16 are high compared with taxpayers in similar occupations and income range (as at June 2017). We recognise that larger claims can be legitimate, however we may review deductions for the client if they remain high in 2016-17.”



If you have received a comment like this on your pre-fill report, it doesn’t mean you need to be alarmed. It’s just another example of the type of approach the ATO are now taking and means that you need to ensure your claims can be backed with appropriate evidence. Your trusted adviser at Allan Hall will be able to assist you with this.


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