The Australian Taxation Office has warned it has the tools to catch people who file incorrect claims for work-related expenses at tax time.
The ATO said it would use real-time data to compare taxpayers with others in similar occupations and income brackets.
The aim is to identify higher-than-expected claims related to expenses including vehicles, travel, internet, mobile phones and self-education.
There are three golden rules for taxpayers to remember, according to the ATO:
- You have to have spent the money yourself and can’t have been reimbursed
- The claim must be directly related to earning your income
- You need a record to prove it
Work uniforms are a common trap
Assistant commissioner Kath Anderson said many taxpayers don’t fully understand what deductions they can claim.
“Some taxpayers even think that you can make a standard claim of $300 without having spent the money,” she said.
“You don’t need receipts for claims up to $300 but you must have actually spent the money, and be able to show us how you worked out your deduction if asked.”
Ms Anderson said deductions for work uniforms are a common trap for employees at tax time.
“It’s a myth that you can claim everyday clothes, for example black pants and a plain white shirt, even if you only wear them to work and your employer says you have to,” she said.
“To legitimately claim your uniform, it needs to be unique and distinctive, such as a uniform with your employer’s logo, or be specific to your occupation and not for everyday use, like chef’s pants or coloured safety vests.”
11 deductions you (probably) can’t claim
Here, in the ATO’s own words, is a list of things you probably can’t claim on your tax return:
1. Trips between home and work. Generally you can’t claim a deduction for these because they’re considered private travel.
2. Car expenses for transporting bulky tools or equipment, unless:
- you need to use your bulky tools to do your job
- your employer requires you to transport this equipment
- there is no secure area to store the equipment at work.
3. Car expenses that have been salary-sacrificed.
4. Meal expenses for travel, unless you were required to work away from home overnight.
5. Private travel, so if you take a work trip that includes personal travel you can only claim the work-related portion.
6. Everyday clothes you bought to wear to work (such as a suit or black pants), even if your employer requires you to wear them.
7. A flat rate for cleaning eligible work clothes without being able to show how you calculated the cost.
8. Higher education contributions charged through the HELP scheme.
9. Self-education expenses when the study doesn’t have a direct connection to your current employment – your future or dream jobs don’t count.
10. Private use of phone or internet expenses – only the work-related portion counts.
11. Up-front deductions for tools and equipment that cost more than $300. However, you can spread your deduction claim over a number of years. That’s called depreciation.