Tax myths ex­posed

Gatton Star - - TAX TIME / ADVERTISIN­G FEATURE -

TAX sea­son is un­der­way and to help Aus­tralians get their re­turns right, the Aus­tralian Tax­a­tion Of­fice (ATO) has iden­ti­fied the top tax myths and mis­un­der­stand­ings it says are caus­ing in­cor­rect claims. Others can be found on the ATO web­site.

Top 10 tax myths

Myth: Ev­ery­one can au­to­mat­i­cally claim $150 for cloth­ing and laun­dry, 5000 kilo­me­tres for car re­lated ex­penses, or $300 for work-re­lated ex­penses, even if they didn’t spend the money.

Fact: The record-keep­ing ex­emp­tions pro­vide re­lief from the need to keep re­ceipts in cer­tain cir­cum­stances. How­ever, they are not an au­to­matic en­ti­tle­ment or a “stan­dard de­duc­tion” for ev­ery­one.

While you don’t need re­ceipts for claims un­der $300 for work re­lated ex­penses, $150 for laun­dry and 5000 kilo­me­tres, you still must have spent the money, it must be re­lated to earn­ing your in­come, and you must be able to ex­plain how you cal­cu­lated your claim.

Myth: I don’t need a re­ceipt, I can just use my bank or credit card state­ment.

Fact: To claim a tax de­duc­tion you need to be able to show that you spent the money, what you spent it on, who the sup­plier was, and when the pur­chase oc­curred. Bank or credit card state­ments usu­ally won’t con­tain this in­for­ma­tion. The only time you don’t need these de­tails is if record-keep­ing ex­cep­tions ap­ply.

Myth: I can claim my gym mem­ber­ship be­cause I need to be fit for work.

Fact: While you might like to keep fit, there are only a very small num­ber of peo­ple who can claim gym mem­ber­ships, such as spe­cial op­er­a­tions in the Aus­tralian De­fence Force.

To be el­i­gi­ble, your job would have to de­pend on you main­tain­ing a very high level of fit­ness, for which you are reg­u­larly tested.

Myth: I can claim all my travel ex­penses if I add a con­fer­ence or a few days’ work to my hol­i­day.

Fact: If you de­cide to add a con­fer­ence or some work to your hol­i­day, or a hol­i­day to your work trip, you must ap­por­tion the travel ex­penses be­tween the pri­vate and work-re­lated com­po­nents.

Myth: I can claim my work clothes be­cause my boss told me to wear a cer­tain colour.

Fact: Un­less your cloth­ing is a uni­form that is unique and dis­tinct to your em­ployer, or pro­tec­tive or oc­cu­pa­tion-spe­cific cloth­ing that you were re­quired to wear to earn your in­come you, won’t be able to claim it. Plain clothes, like black pants, are not de­ductible even if your boss told you to wear them.

Myth: I can claim home-to-work travel be­cause I need to get to work to earn my in­come.

Fact: For most of us, home to work travel is pri­vate since your boss doesn’t pay you un­til you get to work. There are lim­ited cir­cum­stances where some­one who has to trans­port bulky equip­ment can make a claim.

Myth: I’ve got a capped phone plan, so I can claim both per­sonal and pri­vate phone calls.

Fact: Un­less you only use your phone for work, you will have to ap­por­tion the cost and only claim the work-re­lated por­tion.

FOL­LOW THE RULES: The ATO is re­mind­ing ev­ery­one to en­sure their tax re­turns are com­pleted cor­rectly.

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