Keep your receipts, you have been warned! The ATO will be paying close attention to claims in tax returns where there are ‘other’ work-related expenses.
In 2017, 6.7 million Australian taxpayers claimed a record $7.9 billion in deductions for ‘other’ work-related expenses!
Legitimate expenses include home office purchases, union fees, mobile phone and internet, overtime meals and tools and equipment but they are only deductible if they meet the important requirements.
The three important rules for deductible claims:
- You must have paid for it and not been reimbursed e.g. from your employer. You won’t be allowed to ‘double’ claim
- It must be directly related to earning your income and not a private expense. For example a plumber can claim the expenses from driving to jobs but not to a party. There are grey areas dependent on the vehicle. It’s worth checking with your accountant
- You must have a record to prove it e.g. through receipts or a log book. Stay tuned in our next edition on how to keep tax records.
Even though tax return time is months away, you’re incurring expenses now so it’s important to remember the above when claiming a deduction.
The ATO has warned that making an error on your claim won’t fly under the radar with its super sophisticated systems and analytics.
If you have any questions at all, contact one of our tax accountants at Growth Partners. We can help to ensure that you are not accidentally over-claiming, as well share with you the best ways you can track your expenses during the income year.