Work-Related Expenses – Are you Claiming Correctly

Every tax season the ATO has a specific set of targets, and this year it’s work-related expenses. The ATO hopes to expose individuals who deliberately rort the system.

The Tax Office has implemented a new technology which allows the ATO to compare similar individuals to see whether they are over-claiming. Should your expense claims be significantly higher than other people in the same occupation you could be audited by the ATO.

As well as targeting deliberate tax evaders, the ATO has its sights set on those making claims for tax deductions that are either extraordinarily high or do not confirm with the allowable deductions that relate to their specific industry or area of employment.

To ensure you don’t get caught out this tax time, we have provided below a short list of items that the ATO will be targeting:

• Vehicle & Travel Expenses
• Uniform/Clothing Expenses
• Mobile Phone & Internet Expenses
• Self Education Expenses
• Tools & Equipment

Circumstances in which you can claim a work-related expense

Travel expenses – You can claim some travel expenses if they are directly connected with your work, but generally you can’t claim for travel between home and work – this is considered private travel.

Phone & Internet Expenses – You can only claim for business related call and internet expenses. You will need to show how you divided u p the expenses between business and private usage.

Uniform/Laundry Expenses – You can claim a deduction for the cost of buying and cleaning occupation specific clothing. Conventional clothing that you wear for work is not tax deductible.

Home Office Expenses – You may be entitled to claim deductions for home expenses including a computer, phone or other electronic devices you are required to use for work purposes.

Self Education Expenses – Educating yourself in order to improve your wage or move up in your industry is a claimable expense. If you educate yourself in order to

get another job or for private interest, this is not claimable.

Tools & Equipment – If you buy tools, equipment or other assets to help earn your income, you may be able to claim a deduction for some or all of the cost.

Important Notes

If you claim a deduction you need to remember the three golden rules, “says ATO assistant commissioner Graham Whyte.

“One, make sure you spent the money yourself and were not reimbursed.

Two, make sure it’s related to your job, and,

Three, you need a record to prove it.”

So this tax season, before you make any tax claims or deductions, make sure that you have the paperwork to back it up!  It is essential that you keep an organised and secure record of your receipts, invoices, logbooks and bank statements as a proof of purchase, just in case you are audited by the ATO.

So, before you start happily tallying up all those work-related expenses you should make sure that they really are work expenses.  Remember we are always happy to help so feel free to contact us online or call our team on 07 3263 7030 today for further advice on what you can claim with regards to work related expenses.