THE ATO is cracking down on dodgy claims for ‘other’ work-related expenses.
Assistant Commissioner Kath Anderson said last year 6.7 million taxpayers claimed a record $7.9 billion in deductions for ‘other work-related expenses’.
“No matter how small, it’s not ok for someone to expect the rest of us to pay for their private expenses,” she said.
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,” Ms Anderson said.
“Many taxpayers make legitimate claims, but we are also seeing errors in some claims, and some taxpayers are making risky or outright false claims.
“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 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,’’ she said.
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 myTax return or provide to their tax agent.