No, You Can’t Claim Tax Deductions on Your Wedding

The ATO has revealed some of the most “outrageous” tax deductions that Australians have tried to claim, including a wedding reception and Lego sets.

Before you say I do, there is one thing the ATO wants to make sure you understand: you can’t claim tax deductions on your wedding.

Recently, the Australian Taxation Office (ATO) revealed that it has received some of the weirdest claims last financial year. In a statement in July 2019, the ATO said that just under 700,000 Australians claimed deductions under the “other” category last financial year, worth just under $2 billion.

But many of these claims have been rejected by the Tax Office.

Among that is a full claim for a $58K wedding. Apparently, one happy couple thought they can claim the full cost of their wedding reception on their tax return.

Assistant tax commissioner, Karen Foat, said, “These claims add up to a lot of money. If the deduction isn’t directly related to earning income, we can’t allow it.”

While that may sound heartless, especially for newlyweds wearing their hearts out on their sleeves, Ms. Foat said the ATO just “can’t turn a blind eye to it.”

The truth of the matter is, of the 700,000 taxpayers who claimed about 2 billion of ‘other’ expenses in the financial year, 88% needed to be adjusted. This is not good news for a government agency coming from 8.7 billion tax loss due to dodgy claims.

The total value of claims over three financial periods has increased, too: from $1.74 billion in 2015 to $1.87 billion in 2016 to $1.97 billion in 2017.

“Where people make genuine mistakes, we simply disallow the claim. But when people are deliberately making dishonest claims, particularly for large sums, we will disallow the claim and may impose a penalty,” Ms Foat said.

As it turned out, the newlywed couple made a fraudulent claim saying it was in “relation to a work-related overseas conference.” The husband claimed $33,087 in his return and $25,259 in his wife’s.

In case you’re wondering, penalties for false tax claims can be around 25% to 75% of the shortfall amount. The ATO does not look kindly upon tax dodgers. And the newlyweds with the $58K wedding reception? They were prosecuted, according to Ms. Foat.

But if you think claiming tax deductions on wedding expenses is outrageous, you haven’t heard—or read, the rest of it.

According to the ATO, they rejected other weird claims like the costs of a daughter’s first birthday party, gambling losses, phone bill for calling parents, the cost of raising twins, newborn baby expenses, and many more.

One taxpayer claimed Lego sets bought throughout the year for their children.

“Personal gifts don’t qualify, and it’s not OK to ask Australian taxpayers to subsidise presents,” Ms Foat said.

Two other taxpayers also claimed dental expenses, saying it’s deductible because a nice smile is essential to landing a job.

Ms. Foat said, “We want people to understand what expenses they can claim and receive every dollar they are entitled to.”

“But making incorrect claims that are personal or private take funding away from providing essential community services, and that’s not OK.”

The long and short of it: if you’re not sure whether you can make a claim or not, seek professional advice and talk to tax accountants – this is where our Highview experts can help!

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