Work-related expenses are usually one of the most commonly claimed deductions on individual taxpayers returns. It is for this reason that these claims are also the most closely scrutinized by the Tax Office.

The Tax Office regularly finds that this particular part of the return is often riddled with false claims or claims that cannot be positively verified as well as claims for expenses that are not even work-related at all!

Some of the most commonly claimed work-related expenses include car and travel, uniform and self-education.

Each year the Tax Office closely reviews tax returns from the previous year and will identify specific occupations where:

  • average amounts of claims are high
  • there is an increase in the number of people making claims, and
  • there are a lot of people making claims for the first time.

Those occupations identified from last years returns as having particularly inconsistent claims for work-related expenses include truck drivers, sales and marketing managers, sales representatives and electricians.
The Tax Office has indentified some of the errors from employees in those areas of employment to include:

Truck drivers – claiming motor vehicle expenses associated with transporting bulky tools, including travel to and from work; claiming travel allowances they are not entitled to; and, not keeping adequate records to support claims for internet and mobile phone use.

Sales representatives, sales and marketing managers – over-claiming home office expenses such as rent, rates and electricity; failing to keep appropriate records for mobile phone and internet use as well as not adjusting claims to account for the proportion of private use; and, not keeping an up-to-date log book when claiming motor vehicle expenses.

Electricians – claiming motor vehicle expenses for carrying bulky equipment even though their employer has advised there is no requirement to carry the equipment or the equipment does not meet the bulky provisions; claiming the living away from home allowance when they are not entitled to it; and, not to keep a log book for expenses related to a one tonne vehicle when it is used for both business and private use.

This year the Tax Office will contact employees in the identified occupations to outline the common mistakes that are made and to provide advice on how to avoid these mistakes in future tax returns.

Whether or not you are employed in the nominated occupations to be targeted this financial year it is important to be diligent in your tax reporting and the deductions that you claim. There are a few simple things to remember when claiming work related expenses that, if followed, will ensure that you are legally compliant with your tax obligations whilst legally maximising your return.

Remember:

  • you must have incurred the expense in the year you are claiming it
  • the expense must be work-related and not privateif the expense has been reimbursed by your employer it can’t be claimed
  • receiving an allowance from your employer does not automatically entitle you to a deduction, and
  • if your claims total more than $300 you need to keep written evidence.

If you would like more advice on claiming work-related expenses for your specific occupation or for any tax time related queries please contact The Quinn Group on 1300 QUINNS or click here to submit an online enquiry.