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  • Work-related expenses

    We are paying close attention to people who over-claim work-related expenses.

    If your clients are claiming work-related expense deductions, remind them that they need to satisfy the following:

    • They must have spent the money and not be reimbursed.
    • It must be directly related to earning their income.
    • They must have a record to prove it.

    This tax time, we ask you to pay particular attention to:

    • claims for home office, clothing and laundry and car expenses
    • ensuring a direct connection to income earnt and apportionment of private expenses
    • application of substantiation exceptions – for example, even if your client doesn't need written evidence because their laundry expenses are under $150, they still need to show how they have estimated their costs.

    You can check if your clients made higher than expected work-related expense claims last year by downloading their pre-fill report. This will help you decide whether their deductions require closer scrutiny when you prepare their tax returns.

    Help your clients get their work-related expense claims right by advising them:

    • to consider if their employer would confirm that the expenses were required to earn their income and that they were not reimbursed
    • that receiving an allowance from their employer does not automatically entitle them to a deduction
    • that where there are exceptions to the substantiation rules
      • they still need to have spent the money
      • the expense must be directly related to earning their income
      • they must be able show how they worked out their claim.
       

    Your clients can keep track of their deductions using the myDeductions tool in the ATO app. They can email you their data so you can include it in their tax return.

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    Last modified: 31 May 2018QC 45702