ATO Crackdown on Tax Deductions for the 2018 Tax Return Season

The Australian Taxation Office (ATO) have made it known that there will be a close eye on unspecific tax deductions in 2018. Substantiation, or evidence, will also be a key focus for the ATO in the 2018 tax return season. Let the team at Online Tax Return assist you to avoid ATO scrutiny this year.

Don’t Claim Tax Deductions on Vague, ‘Other’ Work Expenses

The ATO has seen an unprecedented increase in unsubstantiated, ‘other’ work expense claims over the last few years. In 2017, 6.7 million Australian taxpayers claimed over $7.9 billion in such claims! In fact, over $100 million worth of incorrect tax deductions have been adjusted by the ATO since July 2016.

If you wish to claim tax deductions on your work-related expenses in your 2018 tax return, it’s important to ensure:

  1. You incurred the expense and you were not reimbursed;
  2. The expense was directly related to earning your income; and
  3. Have a record to prove your purchase.

If your expenses are used partly for work and private use, you must ensure your claim is only for the work-related usage. In the 2018 tax return season, the ATO will be on the lookout for people fudging numbers to pass off private expenses as work-related tax deductions.

Remember that risky or false claims will inevitably be found. Even if you can only manage to keep your receipts and invoices in a shoe or glovebox, make sure you’re able to substantiate your claims. Each year, the ATO disallows many claims due to lack of evidence – like receipts, or logbooks to demonstrate your calculated expense. With smartphones being the norm, it’s easier than ever to find a physical or electronic way to keep your records. Develop good habits before lodging your 2018 tax return!

Commonly Vague Tax Deductions

Here’s a list of items commonly identified as a hot spot for unsubstantiated claims:

Don’t Risk It
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Online Tax Return has a team of registered tax agents on your side to ensure your 2018 tax return goes off without a hitch. Our tax accountants are experienced in the do’s and don’ts of ATO regulations. We’re also 100% local, so you can be sure of support when you need it.

Don’t risk ATO scrutiny. Lodge your 2018 tax return with Online Tax Return!

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice.