The Australian Tax Office (ATO) has been paying extra attention to people claiming higher than expected deductions.
There are 3 golden rules when lodging work related expense claims:
1: You must have spent the money yourself, and not have been reimbursed.
2: The expense must be directly related to earning your income.
3: You must have a record to prove it.
Overdue tax returns? Visit our How It Works page and follow the steps to lodge your tax online now.
To make sure you are not breaking any rules see our page Lodging compliant tax returns in 2017
The tax department are auditing more and more people in relation to work related expenses. Part of their audit can include ringing the tax payer’s employer to verify that the deductions claimed in relation to the employee’s income are legitimate.
For example, if the individual has claims personal vehicle deductions, verifying with the employer that the taxpayer is required to use their private motor vehicle for work related purposes, or whether the employee has already been reimbursed for work related expenses.
For more information on Motor Vehicle deductions, see our Claiming Motor Vehicle Expenses page.
If the ATO find that claims for work related expenses are false or cannot be substantiated, they will disallow those expense and force the tax payer to repay the tax deduction in relation to those expenses. In addition, there can be heavy fines for making false claims for work related expenses.
See our page How It Works and lodge your tax online now.