Yahoo Finance ATO warning over common $300 tax deduction trick
Taxpayers can claim work-related expenses of $300 or less without a receipt.
The Australian Taxation Office (ATO) is warning Aussies about a common tax “myth” that could land them in hot water this tax time. Tax time is in full swing and many Aussies are looking for deductions to help maximise their refunds or lower their tax bills.
The ATO allows taxpayers to claim work-related expenses of $300 or less without requiring receipts. But that doesn’t mean you don’t need any proof whatsoever, or you can claim the deduction without actually incurring the expenses at all.
“If your total claim for work expenses is $300 or less, you may not need a receipt, but you must be able to prove that you spent the money, and give a reasonable explanation on how you calculated the amount of your claim,” the ATO said.
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“If your claim for work expenses is more than $300, you must have written evidence (such as a receipt) to support all your claims.”
Tax Invest Accounting director and registered tax agent Belinda Raso warned the $300 wasn’t an “automatic deduction” and said the tax office would be closely watching the deduction this year.
“You must have still purchased the items and be able to explain what you’ve purchased, why and how you use it in your job,” Raso told Yahoo Finance.
“Say to yourself, ‘If I didn’t have this job or this business, would I have gone and bought this?’ And in most cases it will be a claimable deduction.”
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The $300 deduction rule does not apply to claims for car expenses, meal allowances, award transport payments allowance or travel allowance expenses.
The ATO allows you to claim laundry expenses of $150 or less without receipts and this amount is included within the overall $300 limit.
What if I don’t have receipts?
If you’re claiming work-related expenses over $300 and don’t have receipts, Raso recommends first contacting the supplier to see if they have a copy. Businesses like Bunnings and Officeworks will often email copies of receipts.
If you can’t get a copy from a supplier, the ATO allows taxpayers to recreate their tax records if they are lost or stolen.
Raso said you can get a copy of your bank statement and take a photocopy or picture of the item you’ve purchased.
“On top of that, you need to have a note of what item you purchased, how it was used in your job and why you purchased it,” Raso told Yahoo Finance.
“Then for bonus points, take a photo of the actual item to prove that you've got it and then you can even go to the supplier's website and just take a screenshot.”
Intuit QuickBooks research found Aussies are losing $7 billion in unclaimed deductions due to lost or damaged receipts, or around $341 each.
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