Each year the Australian Tax Office selects certain occupations that it plans to target in relation to work related expenses claims. On the ATO’s radar this year for individuals tax returns are incorrect or fraudulent refunds for over-claims and deliberate fraud; work-related expenses for occupations with high levels of claims; people getting caught up in tax avoidance schemes; and omitted income, including dividends and interest, capital gains, and foreign source income.
Of particular interest, the ATO is reviewing the tax returns of plumbers, IT managers and defence force commissioned officers this year for any perceived irregularities, taxpayers whose claims have increased significantly in the past few years and requiring taxpayers to complete work-related expense information sheets when lodging their tax return.
These areas are under focus as they are run by individuals with numerous requirements to be fulfilled and compliance to be met.
Also under scrutiny are the construction industry, self managed superannuation fund sector and employer obligations for super in high risk industries such as cafes and restaurants, real estate agencies and building and construction.
Basic rules of claiming a deduction to be noted are:
• the deduction must be claimed in the same income year that you made the purchase
• an expense can’t be claimed that you have been, or will be, reimbursed for
• individuals may have to substantiate their claims with written evidence
• apply different rules for expenses where individuals prepay for a service that extends beyond the current income year.
Individuals should take care when filling out documents to be lodged with the ATO – ensure that the information provided is accurate and up to date. Honest mistakes are excusable, but negligence is not.
Here at The Quinn Group, our experienced team of Accountants, Tax Agents and Tax Lawyers can assist you with all of your taxation needs as well as ensuring you are compliant with all of the ATO tax requirements to ensure you comply with the tax laws but also legally minimising your tax liability. Please submit an online enquiry or call us on 1300 QUINNS (784 667) to book an appointment.