My name is Maggie and I’m a member of the Public Relations team at the Australian Taxation Office. Ahead of Tax Time 2019, we’ve prepared a range of guides and posters to help people complete their tax returns. The material covers information about work-related expenses in various industries and some common general deductions, such as travel or laundry expenses. We are contacting you because we are hoping your chamber will find the information useful and will find value in sharing it with your networks. Below are some links to posters and guides about the information that is most commonly asked about, for you to circulate digitally or physically:
We also have occupation-specific posters for a range of other jobs so if there are any industries that are prominent in your area that you think would benefit from similar information please let me know.
11 deductions you (probably) can’t claim on your tax return
1. Generally, you can’t claim a deduction for trips between home and work – it’s considered private travel. This is true even if you do minor work-related activities between home and work (such as collecting mail), work outside normal business hours, are on-call or don’t have access to public transport.
2. If you claim car expenses based on transporting bulky tools or equipment, it’s not enough to simply choose to carry a few tools. In order to make a claim you need to show:
you need to use your bulky tools to do your job
your employer requires you to transport this equipment
there is no secure area to store the equipment at work.
3. You can’t claim a deduction for car expenses that have been salary sacrificed.
4. You can’t claim meal expenses for travel unless you are required to work away from home overnight.
5. You can’t claim a deduction for private travel. If a trip was for work and personal reasons (for example, if you added a few days onto a business trip for sightseeing) you can only claim the work-related portion.
6. You can’t claim a deduction for every day clothes you bought to wear to work (for example, a suit, black pants or a white shirt), even if you’re required by your employer to wear them.
7. You can’t claim a flat rate for cleaning eligible work clothes without being able to show how you calculated the cost.
8. You can’t claim a deduction for higher education contributions charged through the HELP scheme.
9. You can’t claim a deduction for self-education expenses if the course or study doesn’t have a direct connection to your current (not future or desired) employment.
10. You can’t claim a deduction for the private use portion of phone or internet expenses– only the work-related portion can be deducted.
11. You can’t claim an up-front deduction for tools and equipment (eg, a laptop or safety equipment) that cost more than $300. You can, however, spread your deduction claim over a number of years (depreciation)
The ATO website has lots of information about what you can and can’t claim as a tax deduction, visit ato.gov.au/deductions.
The top four mistakes people make on their tax returns – are you making them too?
1. Claiming a deduction when you didn’t spend the money
Perhaps you’ve heard that you can claim $50 for work-related phone and internet expenses without written evidence? Or maybe you’ve been told you can claim up to $150 for laundry without having to keep records? While these statements are true, you must have actually spent the money. This is on the ATO’s radar, so if you’re audited you’ll need to show how your expenditure was calculated and prove it was directly related to earning your income
You are responsible for the claims you make in your tax return, whether you prepare it yourself or use a tax agent, so make sure you can demonstrate you actually spent the money.
2. Claiming a deduction for private expenses
You can’t claim a deduction for a private expense. However, if you have an expense that has both a private and work-related component, you can claim the work-related portion. For example, if you use your personal mobile phone for work-related calls, you need to figure out the percentage that relates to your work use, and only claim a deduction for that portion.
3. Forgetting to declare all your income
Most people who forget to declare all their income in their tax return lodge before pre-fill is available in August. Pre-fill automatically inputs most of your information from your employers, financial institutions and government agencies. Just check the details are correct and add any missing information. If you’re lodging before pre-fill is available make sure you include all your income to avoid penalties.
4. Not having records to prove claims
You typically need to keep any documents relevant to your tax affairs for five years after you lodge your tax return. The ATO may ask you to substantiate your claims – even after your tax return is processed – and you could find yourself in hot water if you don’t have the records you need to back up your claims.
You must have evidence to prove your claims. The ATO has an app that lets you keep track of your work-related expenses on the go and then upload them to your tax return or tax agent at tax time. Check out ato.gov.au/myDeductions
Communications Officer, Public Relations
Australian Taxation Office
P 03 860 19734