Tax Return Crackdowns

The Australian Taxation Office (ATO) is targeting those claiming work related expenses and quite literally going through your dirty laundry bills to make sure it all “adds up”. The new financial year has begun which means it’s now the busiest time of the year for the Australian Taxation Office (ATO) as they prepare to file 10 million tax returns. Each year the ATO works hard to detect any “Problems” when it comes to individual tax returns. So, it’s no surprise that this year, they will be cracking down on the individuals claiming work related expenses.

Why? Well the ATO have noticed quite a number of incorrect tax returns being filed. It wasn’t until they really cracked down on all work-related claims and quite literally went through all your dirty laundry bills to realise that workers have been claiming things they just aren’t entitled to. ATO assistant commissioner Kath Anderson reported that last financial year, approximately 6.7 million taxpayers claimed a record A$7.9 billion for ‘other’ work-related expenses. Anderson also revealed that this year, the ATO had contacted one million tax payers to address non – compliance work related expenses with adjustments reaching AUD$100 million.

To claim work-related expenses, keep in mind these quick four points also known as the ATO’s golden rules:

1. You must have spent the money yourself.
2. The money you spent was not reimbursed.
3. The expense must be directly related to earning your income.
4. You must have a record to prove it.

Tip: If the expense was for both work and private purposes, you can only claim a deduction for the work-related portion.
So simply make sure you lodge your return correctly, have proof to back you up and only claim what you are entitled to claim. Knowingly Filing an incorrect tax return just isn’t worth it. There are penalties and it’s up to you to make sure you don’t get penalised.

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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.