ATO Audit Red Flags in 2025 – What Might Trigger a Closer Look
- Aditi Bohara
- 7 hours ago
- 2 min read
With smarter data-matching tools and industry benchmarks, the ATO is quick to spot when something doesn’t look right on your tax return. These are the most common red flags that can trigger a review in 2025 and what you can do to stay in the clear.
🚩 1. Claiming Deductions for a Job You Don’t Have
Claiming work-related deductions like uniforms, courses, or travel, without active employment is a major audit trigger.
What to do: Only claim expenses related to income you actually earned. If you were unemployed, job-seeking expenses might apply but keep receipts and check eligibility.
🚩 2. Work-From-Home Claims Without Hour Logs or Bills
From 2023–24 onwards, the fixed-rate WFH method requires both a record of hours worked and supporting bills (electricity, phone, internet).
What to do: Keep a weekly spreadsheet or calendar record and your utility statements, the ATO may ask to see both.
🚩 3. Income Missing from ATO Data Feeds
Whether it’s interest from your bank, Airbnb income, or Uber driving; the ATO probably already has the numbers.
What to do: Log in to your myGov ATO portal and check the pre-filled income summary before lodging. If you see something missing, don’t ignore it; report all income.
🚩 4. Car Claims Without a Valid Logbook or Reasonable Use
The ATO regularly targets excessive car claims, especially for people in desk jobs.
What to do: Use a valid logbook (12-week minimum, updated every 5 years) or keep notes justifying kms driven for work. No, commuting doesn't count.
🚩 5. Claiming Repairs for Properties That Weren’t Rented
Trying to deduct repairs or interest for a property that wasn’t generating rental income? That’s a common red flag.
What to do: Only claim deductions for the period it was available for rent. If the property was vacant or used privately, you can’t claim those costs.
🚩 6. Rental Deductions That Don’t Match ATO Benchmarks
The ATO compares your rental deductions with others in similar suburbs and income brackets. Large claims, especially for interest, depreciation, or renovations, can raise alarms.
What to do: Break expenses into the right categories. Repairs (immediate deduction) vs improvements (capitalized) are not the same.
🚩 7. Crypto Gains That Go Undeclared
The ATO now receives transaction data directly from most Australian and global crypto exchanges. What to do: If you’ve sold, swapped, or spent crypto; you may have a CGT obligation. Declare it, or risk being data-matched into trouble.
Precent Tip:
You don’t have to fear an audit, but you do need to lodge accurately. The ATO is less interested in honest mistakes and more focused on careless, copy-paste deductions or missing income.
Need help navigating tax time?
Precent can review your return, help you claim with confidence, and keep your tax record squeaky clean.