Australians thinking about over-claiming work-related expenses to help with the rising cost of living are being warned by the Australian Taxation Office (ATO) that they will come under fire and potentially face a review and/or audit.

Every year, about eight and a half million Australians claim about $20 billion worth of work-related expenses. The average claim is about $3,000.

ATO assistant commissioner Tim Loh told ABC News that people trying to push the envelope on work-related expenses, COVID-related expenses, rental deductions and failure to reveal or downplay cryptocurrency investments would be targeted.

When it came to work-related travel expenses, he expected these would fall because most people had been working from home during the pandemic.

"We did see a bit of a decrease last year. But we do expect the current travel expenses to go down quite significantly because if you've been working from home, you can't be at two places at once."

"The other thing we are focused on is laundry expenses. Obviously, if people have been working from home, [they would have not been] wearing their uniform."

For people working in a field with COVID-related expenses, Mr Loh said there were certain rules that needed to be satisfied in order to claim back deductions for things like rapid-antigen tests.

"So, if you're working out whether you can go with your mates to Byron Bay, that's not going to be a deductible expense for that rapid test."

ATO's 80 cents tax shortcut runs until June 30

Mr Loh said the 80 cents shortcut method, introduced during the pandemic, would still be available up until June 30 this year.

The ATO introduced this shortcut method in 2020, in response to the expectation that work-from-home claims would rise due to pandemic lockdowns.

This method allows people to claim 80 cents per hour for all their running expenses, rather than needing to calculate specific running costs.

But tax advisers have previously warned that, while the method makes things easier as the record-keeping is not as onerous, the tax shortcut could result in lower claims.

Mr Loh said the main benefit of using the 80 cents tax shortcut was, "you didn't have to work out or itemise any of the deductions, you just work out the number of hours you work from home, multiply that by 80 cents per hour".

"Now, if you've been working, so you know, full-time at home for, say, 48 weeks of the year, that can work out to the deduction [being] about $1,500," he said.

Other methods to claim work-related expenses require proper records 

For those who are willing to apportion expenses and keep proper records to prove which part of the expense was work-related and which part was personal, Mr Loh said they could instead use the 52 cents per hour fixed rate method or the actual cost method.

He said people watching Stranger Things on Netflix or calling their mother or father was considered to be a private expense.

"We see people try to claim 100 per cent of the expense when [they] for some of the time may [have been] using the internet for private purposes," Mr Loh added.

"The best thing to do is check out our ATO website, where we've got some comparison calculators, which can work out what you can and can't claim and work out what the best result is for your particular circumstances."

800,000 Australians investing in cryptocurrencies under watch

Cryptocurrencies are growing in popularity, with about 800,000 Australians investing in them over the past few years.

"We are really focused this year on making sure people understand that when you sell, swap or exchange crypto, there is a taxable transaction," Mr Loh said.

"And also, to make sure that you keep good records."

He said over the past financial year, 500,000 people had a transaction in crypto and over 300,000 people invested in crypto for the first time.

"Crypto isn't anonymous, we have done a matching protocol with cryptocurrency exchanges and they share that information with us, to allow us the data match," he said.

Over-the-top rental deductions again under fire

As always, the ATO is also keeping a close focus on rental property deductions.

"One thing we are seeing people do is refinance their investment loans and use that extra funding to invest in things like on your boat or car, which I consider to be a private expense," Mr Loh said.

"If someone is doing that, you need to make sure that you're not claiming an interest deduction for the additional funds that you are using for that refinance portion that's related to a private expense.

"Another thing we sometimes see people do is claim the kitchen renovation as an outright deduction.

"If they spent 20,000 on a kitchen reno … you can claim that over a period of time, but not outright as a deduction."

Beware of scammers pretending to be the ATO

Mr Loh said there were more than 50,000 tax and super scams reported in 2021 and the average dollar amount lost to these scams was $5,600.

In the past year alone, the ATO had identified and taken action against about 600 websites impersonating the agency's online services.

"We're seeing a lot of SMS and email scams leading to fake myGov sign-in pages – we've had more than 360 of these scams reported since April 2022."

But he added that many different types of tax and super scams happen all year round, not just in the lead-up to tax time.

"Scammers are always looking for new ways to convince unsuspecting taxpayers into divulging personal information, such as bank details, usernames and passwords," Mr Loh said.

"Check in with someone you trust, like a friend or family member. Even better, go to the ATO's website where we have a listing of all the current ATO scams or call us on our dedicated scam hotline: 1800 008 540."