Common Tax Deduction Mistakes

Most deduction mistakes aren't dodgy. They're guesses, or rules people half remember. Here are the ones the ATO keeps seeing, and how to get each one right.

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By the Nomo team · Last reviewed 24 September 2026

What the ATO is watching this tax time

For Tax Time 2026 the ATO says it's focusing on work-related deductions and income people leave out. It has specifically called out travel to and from work and childcare as private costs, working from home claims without proper records, and the idea that over-claiming "a little" won't be noticed. See the ATO's Tax Time 2026 focus areas.

Ten mistakes, and how to avoid them

• Claiming the drive from home to work. The trip to your regular workplace is private, however early or far. Do this instead: Claim the trips you make once you're working, like site to site. See driving between job sites.
• Claiming the private share. Your phone, internet, laptop or car is rarely 100% work. Do this instead: Work out the work share and keep a record of how you did it.
• Claiming something you were paid back for. If your employer reimbursed it, it's not your expense. Do this instead: Leave reimbursed costs out.
• No record, or one made up in July. A claim without evidence can be disallowed. Do this instead: Keep receipts and trip records as you go. See receipts and record keeping.
• Estimating work from home hours. The fixed rate method needs a record of the actual hours, kept at the time. Do this instead: Record hours as you work. See work from home deductions.
• Claiming plain clothes. Everyday clothes are private, even if you only wear them to work. Do this instead: Only claim compulsory uniforms, occupation-specific or protective clothing.
• Claiming childcare. Childcare is a private cost, even though it lets you work. Do this instead: Leave it out of your deductions.
• Over-claiming cents per km. The method stops at 5,000 work km per car, and private trips don't count. Do this instead: Keep a trip record and check the cap. See cents per km.
• Claiming your ordinary driver's licence. It's private, even if your job needs you to drive. Do this instead: Only renewals of special licences or permits for your job may count.
• Rounding up "a little". Small over-claims add up, and the ATO looks for claims much higher than others with a similar job and income. Do this instead: Claim what your records show.

What if you've already made a mistake?

It happens. You can generally amend a tax return to fix it. The ATO says penalties depend on whether you took reasonable care, and telling it about a mistake before it contacts you generally means lower penalties. See the ATO on voluntary disclosures, or talk to a registered tax agent.

The fix for most of these: records as you go

Almost every mistake on this list comes from reconstructing the year in July. Nomo is built to stop that: trips recorded as you drive, with a purpose, work from home hours clocked as you work, and receipts snapped at the counter. Nomo is an Australian tax deduction and mileage/work kilometre tracking app for PAYG employees and sole traders.

1. A purpose on every trip

   Sort work from personal right after the drive.

2. Hours recorded as you work

   Clock in and out, so there's nothing to estimate.

3. Receipts kept, not lost

   Snap it and mark it Work, Mixed or Personal.

Who Nomo is for

Anyone doing their own tax return who'd rather get it right the first time.

Questions people ask

Can I claim travel to work?

Usually not. Travel from home to your regular workplace is private, with limited exceptions.

Can I claim childcare?

No. The ATO treats childcare as a private cost.

What if I don't have a receipt?

Claims of your actual work expenses need records. From 2026–27, if you don't claim them, the $1,000 standard deduction may apply instead.

How does the ATO know?

The ATO says its data analytics look for claims that are much higher than others with a similar job and income, and it can ask you for records.

What if I made a mistake last year?

You can generally amend your return. Telling the ATO before it contacts you generally means lower penalties.

Related guides

Sources

• ATO: Tax Time 2026: 3 key focus areas
• ATO: ATO warns on copy and pasting claims
• ATO: Claiming deductions
• ATO: Trips you can and can't claim
• ATO: Working from home: fixed rate method
• ATO: Voluntary disclosures

By the Nomo team · Last reviewed 24 September 2026. We check these pages against current ATO guidance and update them when the rules change.

General information only, not tax advice. Rules change and everyone’s situation is different, so check ato.gov.au or talk to a registered tax agent about your situation. Nomo is a record keeping app, not a registered tax agent.