EOFY quiz: Can you spot a Dodgy tax deduction

It’s that time of year when Australians from all walks of life do their utmost to test their accountants’ skills at maximising tax deductions. How does your tax knowledge stack up? Take this quiz and find out.

1. 17th century French Finance Minister Jean-Baptiste Colbert famously observed that the art of taxation involves:

a) “So plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.”

b) “Brutally punishing the makers of bad wine, tasteless cheese and ill-fitting petticoats to drive them from the marketplace.”

c) “Annually guillotining a few petite bourgeoise merchants to encourage the landed gentry towards scrupulous honesty.”

2. Tax deduction enthusiast Gary Ogden and his accountant David McNeice achieved notoriety a decade ago by attempting to claim the following as work expenses:

a) A$20,000 for a family member’s wedding that business associates were invited to; A$1350 in gambling losses incurred while playing the pokies with a client and a Chewbacca costume purchased for a business networking event.

b) $7000 for an “emotional-support” poodle; A$15,500 of Cabernet Sauvignon used to relieve work-related stress and A$6876 of “business entertainment expenses” incurred at Show Girls Cabaret.

c) A$5000 of secretarial services paid to Mr Ogden’s seven-year-old son for occasionally answering his phone; A$838 of “overtime meals”, many of which were consumed at the local leagues club; a static electricity-dispersing pair of rubber-soled R.M Williams shoes and a Dora the Explorer pencil case.

3. American businesswoman Leona Helmsley’s best-known quote is:

a) “We don’t pay taxes; only the little people pay taxes.”

b) “If anybody in this country doesn’t minimise their tax, they want their head read. Because, as a government, I can tell you, you’re not spending it that well that we should be donating extra.” 

c) “There’s nothing wrong with the younger generation that becoming taxpayers won’t cure.”

4. Your client might be able to claim that A$5000 designer bag they splashed out on if they can: 

a) Get their supervisor to sign a statutory declaration stating that ownership of said bag is key to creating a good impression with the organisation’s clients and likely to result in future promotions and pay rises.

b) Show it’s mainly used to transport work tools, such as a laptop, and not to look amazing when they’re out with friends.

c) Obtain a medical certificate from a doctor confirming that possession of the bag has helped them overcome back problems and feelings of inadequacy and stress.

5. You splashed out A$19,900 on some NFT digital art after your mate convinced you that “NFTs are the new Bitcoin”. The art is now valued at A$15. Can you lessen the financial blow by getting a tax break?

a) Yes, but only if the art represents some historical or cultural significance and you can demonstrate that there was no way to have predicted the plummeting in value. 

b) No, NFTs are a fad and the ATO is fundamentally opposed to perpetuating the hype by assigning them any monetary value. 

c) Yes, if the art is displayed in your place of business and costs less than A$20,000, you may be able to get an immediate write-off.

6. What notoriously tax-shy demographic is best placed to successfully claim their transportation costs as a work-related expense?

a) Tradies 

b) Taxi drivers  

c) Nonagenarian, recently single Australian-American media billionaires   

7. Which nation found itself in the spotlight for widespread tax evasion, with the government collecting only about 10 per cent of the tax it was due in 2010? 

a) The US

b) Venezuela

c) Greece

8. The “Big Three” occupations when it comes to making large tax deductions are:

a) Truck drivers, farmers and vets. 

b) Surgeons, real estate agents and lawyers.

c) Taxidermists, exotic dancers and baristas. 

9. Can your clients claim a deduction for all those rapid antigen tests they’ve had to buy over the last 12 months?

a) No, with the extensive rollout of vaccines, the age of COVID-19 entitlement is over.  

b) Yes, but only if the tests purchased are manufactured in Australia and TGA-approved. 

c) Yes, so long as they kept the receipts and had to get tested for work purposes. 

10. For which of the following working-from-home expenses can your clients legitimately claim a deduction?

a) Power bills, internet expenses, office furniture purchases.

b) Workplace mediation services (marriage counselling), coffees and childcare.

c) Rent, internet expenses, power bills, wellbeing subscriptions.

Answers

  1. a. Read more
  2. c. Read more
  3. a. Read more 
  4. b. Read more
  5. c. Read more
  6. a. Read more
  7. c. Read more
  8. b. Read more
  9. c. Read more
  10. a. Read more

Results

7-10: Congratulations, you could join the ATO’s Tax Avoidance Taskforce! 

4-6: You may be popular with your clients, but you’re probably not so beloved by the ATO. 

0-3: Organise a fake passport and plane tickets to Majorca at the earliest possible opportunity. 

0-3: Organise a fake passport and plane tickets to Majorca at the earliest possible opportunity. 

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