Work-related expenses are one of the most commonly claimed deductions so it’s no surprise the Tax Office plays close attention to these claims in tax returns.
Last year 7.6 million people claimed deductions for work-related expenses.
On average people claimed $1,920 in work-related expenses with the most commonly claimed items including car, travel, uniform and self-education expenses.
As well as common mistakes the Tax Office also finds claims that are false, are not work-related or can’t be substantiated.
The Tax Office looks closely at tax returns from last year and identifies particular 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.
The Tax Office prefers you get it right before you lodge your tax return so they don’t have to contact you about your claims later.
This year the Tax Office will write to around 180,000 employees in the following occupations outlining common mistakes and providing advice on how to avoid these mistakes in this year’s tax return:
- truck drivers
- sales and marketing managers
- sales representatives, and
- electricians.
Some of the mistakes the Tax Office has seen from employees in these occupations include:
Truck drivers – claiming motor vehicle expenses associated with transporting bulky tools, including travel to and from work. Other mistakes include claiming travel allowances they aren’t entitled to and failing to keep appropriate 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. Another common mistake is not keeping suitable records for mobile phone and internet use and failing to adjust claims for private use.
When claiming motor vehicle expenses, they should also ensure they keep an up-to-date log book, which includes starting a new log book when their circumstances change, such as changing jobs or purchasing a new vehicle.
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. Other mistakes include claiming the living away from home allowance when they’re not entitled to it and failing to keep a log book for expenses for a one tonne vehicle when it is used for both business and private use.
Here are some simple rules to help you work out your work-related expense claims:
- you must have incurred the expense in the year you are claiming it
- the expense must be work-related and not private and if 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.
You can also use records other than paper receipts. A full list of accepted records is available on the Tax Office website www.ato.gov.au
The Tax Office has a range of guides and summaries available on its website explaining in more detail the specific claims you can and can’t make.
These include guides for journalists, nurses, teachers and employees in the building industry, as well as summaries of deductions for truck drivers, and people working in mechanical, automotive and electrical trades.
More information, including these occupational guides and summaries, is available from the Tax Office website www.ato.gov.au/occupations or by calling 13 28 61.
Please read Second Commissioner Jennie Granger’s recent speech 'Tax time in difficult times'.
Interviews with our tax time spokesperson can be arranged by calling Media Relations on (02) 6216 1901.
Audio grabs are available from the media centre at www.ato.gov.au.
Last Modified: Friday, 12 June 2009
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