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ATO Keeping An Eye On Taxpayer Deductions

by Mary Swire, Tax-News.com, Hong Kong

21 February 2018


The Australian Taxation Office (ATO) has said that it will be paying close attention to claims for "other" work-related expenses this year and urged taxpayers to keep appropriate records.

Last year, 6.7 million taxpayers claimed a record AUD7.9bn (USD6.2bn) in deductions for "other work-related expenses." Legitimate "other work-related expenses" can include home office expenses, union fees, mobile phone and internet costs, overtime meals, and tools and equipment.

Assistant Commissioner Kath Anderson said that these expenses 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."

Anderson explained that "substantiation will be a key focus area for the ATO this year." She stressed that taxpayers must have a record of the expense and be able to demonstrate how they calculated their claims.

"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.

Anderson added that if expenses are for both work and private use, a taxpayer can claim only a deduction for the work-related portion. She said that the ATO is seeing taxpayers attempt to claim the whole expense, including the private portion.

TAGS: compliance | tax | tax compliance | audit | Australia | fees | tax authority | internet | education | tax breaks | individual income tax

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