The Australian Tax Office (ATO) says too many individuals and small businesses are making excessive tax deductions and has threatened to come after them.

property owners
Photo: iStock/elenaleonova

The update aimed at property owners came in a message conveyed by Taxation Commissioner Chris Jordan in a speech to the National Press Club in Canberra.

The ATO particularly wants to target taxpayers with attitudes like: “Everyone cheats a bit, so I can too”; “others won’t care if I cheat”; and, “I claim deductions (legit or not) to make sure I get a refund”, Mr Jordan said.

He said over-claiming can be due to legitimate mistakes, carelessness, recklessness and fraud.

In 2014-15, more than $22 billion was claimed for work-related expenses.

Common over-claiming tax deductions include property rentals

Mr Jordan said the problem with rental deductions exceeding incomes is that it can result in about $3.6 billion net rental loss.

“There is about $40 billion of rental income, and $44 billion of rental deductions,” he observed.