The top work-related claims the ATO is eyeing this tax time

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April 24, 2018

Work-related tax deductions relating to cars, travel, clothing, internet, mobile phones, and self-education are among the top claims the ATO will be watching at tax time.

The move for closer scrutiny follows an announcement which revealed 6.7 million taxpayers claimed a higher-than-expected $7.9 billion in work-related claims last year, with the ATO noting this included a lot of over-claiming.

The ATO will now evaluate work-related expense claims by comparing taxpayers with people in similar jobs, earning similar incomes.

When taxpayers claim work-related expenses, it’s now even more important that they have records to show:

  • they spent the money themselves and were not reimbursed;
  • the expense was directly related to earning their income;
  • and they have a record to prove it.

Here’s a snapshot of what you can and can’t claim:


Car
These are the most common work-related expense claims. Be aware that trips between home and work can only be claimed if your home was a base of employment, and you were required to travel to a different workplace to work for the same employer. You will also need to show you regularly worked in more than one location each day before returning home, and you had to use your car to carry equipment, such as bulky tools.

Clothes

Basically, you can only claim for clothing that would not be worn outside the workplace, such as protective gear and clothing with company logos. Plain clothing such as white shirts and black pants can’t be claimed. You can also claim the cost of laundering, but you must use a reasonable basis to calculate the expenses.

Bulky goods transport

If you’re seeking a deduction for carrying bulky items (such as wheelbarrows, ladders and cement mixers), you’ll need to show that your employer required you to transport the equipment to work. You’ll also need to show the equipment was essential to earning your income.

Travel – meals and accommodation

If you are required to work away from home overnight, you can claim costs for accommodation and meals, as well as petrol and parking for work trips. If you receive a travel allowance, you’ll need to declare it as income.

Internet and mobile phone

You can claim up to $50 for work-related mobile phone and internet use without the need to provide detailed records. The ATO is also warning against claiming private expenses where they are bundled with work expenses, so you won’t be able to claim mobile phone and internet expenses for personal use.

Self-education

You might be able to claim a deduction for work-related education expenses if your studies directly relate to your current job, such as upgrading your qualifications or improving specific skills.

Home office and work equipment

Deductions for tools, equipment or other assets can only be made if they are used to earn income. Other items you can claim include accessories such as bags used specifically for work to transport a laptop, papers or other work-related items. If you were required by your employer to work from home, you can also claim a percentage of the running expenses for your home office.

Every year, the ATO disallows a lot of claims becomes there is no evidence to prove the expense. So it’s important that you keep a record not only of the expense, but also show how you calculated your claims.

If you’re unsure as to whether something is deductible or not, ask one of our advisers today.

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