Australians on notice to keep their receipts
THE Australian Tax Office ( ATO ) is warning taxpayers they will be paying close attention to claims for ‘ other’ work- related expenses this year, and is reminding people to keep appropriate records.
Assistant Commissioner Kath Anderson said that last year 6.7 million taxpayers claimed a record $ 7.9 billion in deductions for ‘ other work- related expenses’.
“It’s a significant amount of money and Australians expect us to ensure that people are not over- claiming,” she said.
This year the ATO is shining a spotlight on ‘ other’ deductions. Legitimate ‘ other work related expenses’ can include home office, union fees, mobile phone and internet, overtime meals and tools and equipment.
“However, they are only deductible if they meet the three golden rules.
“Firstly, you must have paid for it and not been reimbursed, secondly, it must be directly related to earning your income and not a private expense, and thirdly, you must have a record to prove it.”
Even though tax time is months away, taxpayers will be incurring expenses now. It’s important to remember what you need to do to be able to claim a deduction.
“Many taxpayers make legitimate claims, but we are also seeing errors in some claims, and some taxpayers are making risky or outright false claims”.
“Substantiation will be a key focus area for the ATO this year.” Ms Anderson said.
“It’s important that you have a record of the expense and can demonstrate how you calculated your claims.
“Every year we disallow lots of claims because there is no evidence to prove the expense.
“Yet it’s so easy to keep an electronic record.
“And remember, if your expenses are for both work and private use you can only claim a deduction for the work- related portion.
“We are seeing quite a few examples of people trying to claim the whole expense, including the private portion.”
Ms Anderson warned that the ATO has sophisticated systems and analytics to ensure wrongdoing doesn’t fly under the radar.
“If a claim raises a red flag in the system, we will investigate further.
“We have a range of strategies to make sure people pay the correct amount of tax, ranging from help and education through to audits and even prosecution for more serious cases.”
Ms Anderson advised that to make tax time easier, taxpayers can use tools such as myDeductions in the ATO app to save and store accurate information about their deductions during the income year, which they can upload to their my Tax return or provide to their tax agent.
To find out more about what deductions you can legitimately claim this tax time, visit: ato. gov. au/ deductions
To find out more about the penalties for making false or misleading statements, visit: ato. gov. au/ penalty.
For more information myDeductions, visit: ato. gov. au/ mydeductions.