Yahoo Finance ATO reveals ‘red flag’ for Aussies lodging their tax returns
The ATO has revealed some of the work-related expenses you may have forgotten about.
The Australian Taxation Office (ATO) has warned taxpayers to think twice before ‘copying and pasting’ work-related claims from last year’s tax return.
ATO assistant commissioner Tim Loh said there were some key changes to look out for this tax time when claiming deductions.
“When you’re getting ready to lodge, consider the records you have to support your claims this year – don’t just copy and paste your claims from last year, this will raise a red flag for us,” Loh said.
Also read: Tax trick to boost your deductions by $300
Around 8.6 million Australians claimed nearly $21.6 billion in work-related expenses in their 2022 tax returns.
“We want people to get their deductions right on the first go and claim what they are entitled to, nothing more, nothing less. We have a series of 40 occupation and industry-specific guides which you should have a look at,” Loh said.
“Some occupations have expenses that are specific to their occupation. For example, flight attendants can claim rehydrating moisturisers and nurses can claim stethoscopes. Our guides can help you get it right.”
Three golden rules to claiming deductions
To claim a deduction for a work-related expense, remember the 3 golden rules:
You spent the money yourself and weren’t reimbursed
It directly related to earning your income and it wasn’t private in nature
You have a record to prove it (usually a receipt)
“If you’re not sure, reach out to a registered tax agent to help you get your tax return right the first time,” Loh said.
Working-from-home expenses
Just under 5 million people claimed a working-from-home-related deduction last financial year.
“We know a lot of Aussies are back in the office or have hybrid arrangements, so it’s important to consider whether your claims reflect your working arrangements this year,” Loh said.
To claim working-from-home expenses, Aussies could use the actual cost, or the revised-fixed-rate method to calculate their deduction, as long as they meet the eligibility and record-keeping requirements.
“The revised-fixed-rate method has increased from 52 cents to 67 cents per hour worked from home, and you no longer need to have a separate home office or dedicated work space. If you are working from the couch, you can still use this method,” Loh said.
The revised fixed rate covers costs for electricity, gas, stationery, computer consumables, internet and phone usage.
Aussies could claim a separate deduction for those expenses not included in the rate - for example, decline in value of depreciating assets, such as computers and office furniture.
To use the revised-fixed-rate method, Aussies need a record of the total hours worked from home.
From March 1, 2023, Aussies were required to keep a full record of the total number of hours they worked from home.
You will also need evidence of the expenses covered by the rate that you have incurred, for example a monthly or quarterly bill.
“Keeping the records you need to use this method is really simple – records of hours worked from home can be in any form, for example timesheets, rosters, or a diary of the full year. If you’ve used your phone and electricity when working from home, you just need at least one bill for each of these expenses,” Loh said.
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