The ATO is warning Australians to stop acting on tax tips from AI platforms, finfluencers and social media before lodging.
What’s happening: The ATO has published its 2026 tax time guidance, warning Australians to be cautious of tax misinformation circulating online, including advice generated by AI platforms, shared by finfluencers, or passed on by friends and family.
Why this matters: Getting claims wrong, whether through overclaiming, underclaiming or relying on inaccurate advice, has consequences that can extend well beyond the current tax year.
The ATO is urging Australians to pause before acting on tax information from unofficial sources, and it has specifically called out AI platforms as a source of potentially inaccurate guidance.
ATO Assistant Commissioner Anita Challen said AI tools can be helpful but carry real limitations in a tax context. “AI can be helpful, but it often draws from a broad and inconsistent range of sources, which can lead to inaccurate advice,” she said. “For example, it could be drawing content about tax obligations or laws from outside of Australia or outdated sources. Your tax return isn’t the place for guesswork.”
The warning extends beyond AI to finfluencers, social media tax tips and informal advice from friends or colleagues. With tax-related content spreading rapidly online, Challen said the key message is to verify before acting.
“Tax misinformation often sounds convincing, but dodgy tax advice doesn’t just mislead, it can also lead to significant penalties,” she said. “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.”
For any questions about the legitimacy of tax information, the ATO recommends its own website, the ATO app or a registered tax professional as the only reliable sources.
What the ATO is focusing on this tax time
The ATO has identified work-related deductions and omitted income as its two primary focus areas for 2026.
On deductions, Challen offered a direct warning to anyone tempted to round up claims. “Don’t fall into the trap of thinking if you intentionally claim a little more than you are entitled to, it’ll fly under the radar and that the ATO won’t notice,” she said.
The ATO’s three rules for work-related expenses remain the standard: the expense must relate to earning your income, you must have spent the money yourself without reimbursement, and you must be able to substantiate the claim with records such as a receipt, invoice or logbook.
On income, the ATO is reminding taxpayers to declare all sources, including side hustles, cash jobs, interest and rental income. For small business owners with multiple income streams, this is a particular area of attention. “There are different deductions available for each source of income depending on the nature of the income and occupation,” Challen said.
Working from home deductions
The ATO has confirmed two methods for calculating working from home deductions this tax time.
The fixed rate method allows taxpayers to claim 70 cents for every hour worked from home. This covers additional running expenses that are often difficult to apportion individually, including internet, phone usage, electricity and stationery. Note that the fixed rate has increased from the 67 cents figure that applied in previous years.
The actual cost method requires records of all expenses being claimed and the work-related proportion of each. It typically produces a higher deduction for those with significant home office costs, but requires more detailed documentation.
Challen noted that double-dipping remains a common error, claiming electricity or internet separately while also using the fixed rate method, which already covers those costs. The ATO app’s myDeductions feature allows taxpayers to record expenses throughout the year and share them directly with a tax professional or upload them as pre-fill information at lodgement time.
For anyone who believes they have overclaimed in previous years, Challen’s advice was direct. “You need to lodge an amendment or speak to your tax professional and ask them to amend your prior year claims.”
Income you must declare
The ATO is reminding all taxpayers, including small business owners, that every income source must be declared. Side hustles, cash payments, bank interest, dividends and rental income are all in scope.
Challen noted that many taxpayers underestimate what they are legitimately entitled to claim and encouraged checking the ATO’s occupation and industry-specific guides. The ATO listed several examples of legitimate but less obvious deductions, including guard dog expenses for security workers, outdoor sun protection for fitness industry employees, and professional-grade tools for tradespeople and beauty professionals.
With Payday Super taking effect from 1 July 2026, the ATO used its tax time guidance to remind taxpayers to check their superannuation details and ensure all employer contributions are being received correctly across all jobs. For small business owners managing payroll, the July deadline is now nine weeks away.
The ATO has a range of support services available to the community during tax time including Tax Help program, National Tax Clinic programExternal Link, ATO CommunityExternal Link, translated tax time resources and an Indigenous helpline.
Source: ato.gov.au
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