Did you know that the ATO examines every tax return? Earlier this year, the Australian Taxation Office (ATO) declared it would be cracking down and increasing its focus on taxpayers claiming incorrect work-related expenses.
It’s important to make sure that you aren’t claiming more than you are entitled to! The ATO uses real-time data to compare taxpayers with others in similar occupations and income brackets, to identify higher-than-expected claims related to expenses including vehicle, travel, internet and mobile phone, and self-education. This year the ATO has already contacted one million taxpayers to address non-compliance surrounding work-related expenses, with adjustments reaching $100 million.
Four quick points to remember when claiming work-related expenses
- You must have spent the money yourself.
- You were not reimbursed by your employer for the money spent.
- The expense must be directly related to earning your income.
- You must have a record to prove it.
Tip: If the expense was for both work and private purposes, you can only claim a deduction for the work-related portion.
8 deductions you are unable to claim
- Trips between home and work. Generally, you can’t claim a deduction for these because they’re considered private travel.
- Car expenses for transporting bulky tools or equipment, unless:
- you need to use your bulky tools to do your job
- your employer requires you to transport this equipment
- there is no secure area to store the equipment at work.
- Car expenses that have been salary sacrificed.
- Meal expenses for travel, unless you were required to work away from home overnight.
- Everyday clothes and shoes you bought to wear to work (e.g. a suit), even if your employer requires you to wear them.
- A flat rate for cleaning eligible work clothes without being able to show how you calculated the cost.
- Private use of phone or internet expenses – only the work-related portion counts.
- Upfront deductions for tools and equipment that cost more than $300. However, you can spread your deduction claim over a number of years, which is called depreciation.