As we head into the 2025 tax season, we want to make all individual clients aware of an important update: while we’ve always asked clients to retain appropriate records to support their deductions, this year we’ll be applying a stricter standard when it comes to substantiating claims. This change is in response to the ATO’s increasing focus on compliance, as well as our professional obligations under the Tax Agent Services Act 2009 (TASA).
We’re sharing this now so you have time to prepare, and to avoid any surprises when we begin working on your tax return.
Why this is happening
The ATO has made it clear that it will be applying greater scrutiny to individual tax deductions in 2025, particularly in the most commonly claimed areas, including:
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Work-related expenses
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Motor vehicle deductions
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Home office claims
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Clothing and laundry
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Rental property deductions
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Gifts and donations
At the same time, tax agents are being held to a higher standard of care under TASA. We are required to sight appropriate documentation to support claims made in your return, and cannot rely solely on summaries, spreadsheets, or verbal estimates.
While we’ve always encouraged clients to keep good records and often requested documentation in the past, this year you may find we’re asking for more detail and more consistency than in previous years. This ensures that your return meets the standards now expected by both the ATO and our regulatory body.
What this means for you
To avoid any delays or follow-up during tax time, we encourage you to start gathering your documentation now. Some examples of what we may request include:
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Receipts or tax invoices showing the nature and date of deductible purchases
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Logbooks or odometer records to support vehicle claims
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A diary or work-from-home log showing hours worked from home (use our free template here)
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Evidence of laundry and uniform costs (see our guide to clothing and laundry deductions)
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Donation receipts from registered charities
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Statements for investment income such as interest or dividends
Common misconceptions
We understand that many deductions may feel routine or straightforward — but the ATO’s expectations around recordkeeping continue to evolve. For example:
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You can’t claim home-to-work travel unless you’re carrying bulky tools and meet specific conditions
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Work clothing must be occupation-specific, protective, or have a logo — general office wear is not deductible
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Working from home claims must be backed by a consistent record — estimates are no longer accepted
If you’re unsure whether something is deductible, the ATO has some great references such as Deductions you can claim.
Our Role
As your registered tax agent, our goal is to ensure your return is accurate, compliant, and well-supported — reducing the risk of audit activity or future ATO review. While this may mean a few extra questions from our team this year, we believe this proactive approach is in your best interest.
If you’re unsure what records you should be keeping or would like to clarify what applies in your situation, please don’t hesitate to reach out. We’re here to help.
We appreciate your cooperation as we work together to meet the evolving standards of tax compliance in 2025 and beyond.
