ATO targeting work-related deductions
You are liable to pay an income tax on your taxable income. To reduce your taxable income you can claim deductions for work-related expenses. Currently the ATO is focusing on the work-related expense claims in relation to:
1. Using your computer, phone or other electronic devices to perform duties;
2. Transporting bulky tools and equipment;
3. Overnight travel.
If an employer requires you to use your computer, phone or other electronic devices for work purposes you may be able to claim a deduction for your expenses. To claim a deduction you must be able to show how you use the device for work. You are not allowed to claim a private usage portion. Additionally, you should keep a diary with the details of your work-related use.
Generally you cannot claim a deduction for travel between home and work. A deduction is allowed if you need to transport bulky tools and equipment. To claim a deduction you must comply with three rules and keep the necessary records. Firstly, you have to demonstrate that you need to use bulky tools to do your job. Secondly, your employer expects you to transport this equipment. Finally, there is no secure area to store the equipment at workplace.
If you go on a work-related trip and stay overnight (eg. interstate conference) you may be able to claim deductions for meal, accommodation and other incidental costs. Each year the ATO establishes an amount of a reasonable travel allowance that covers the expenses of overnight work-related travel. If your employer paid you up to the reasonable travel allowance and you are not required to include this amount in your assessable income, then you cannot claim any deduction. In this case there is no record keeping requirement. However, if you spent more than an allowance you can claim an excess. You must keep the details to support your claim, including the invoices, receipts for travel expense, record of allowance received and a diary.
If your tax return is selected for a review or an audit and you don’t keep the necessary records, your claim for a deduction may be disallowed and penalties may be imposed. Appointing a tax lawyer in these situations is recommended. The tax lawyers at The Quinn Group have many years experience dealing with these matters. Call us on 02 9223 9166 to arrange an appointment or submit an online enquiry here.