26th June, 2018
Every single end of financial year sees office workers pinged for claiming expenses they’re probably not entitled to. So how do you avoid the ATO net closing in?
From laptops, to stationary, to home offices – office workers have a lot of scope to claim expenses, but only in certain circumstances.
It’s tempting to over-claim and hope for the best, but with the ATO fine-tuning its systems, winging it has become a more dangerous game.
So, other than keeping your online accounting software up to date, here are some other things office workers should keep an eye on come tax time.
The information contained in this article is of a general nature only and intended for Australian audiences.
For advice particular to your circumstances, please see a tax professional.
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Every year the ATO sees people working from home trying to claim expenses for the cost of running a home. They think doing some work there proves the claim can be made.
But over-eager claimers need to keep in mind that while you can claim home expenses, they relate to places which are designated a home office.
So there’s no claiming expenses for the kitchen, loungeroom or bedroom – you need to apportion your claim to the actual room you do the work in for the time period you do work in it.
This one can be tricky, but the ATO has a handy calculator here.
You can claim a percentage of the costs of running the home office.
We’re talking the depreciation of home-office equipment, work-related phone calls, electricity and heating costs.
It’s important to keep a diary of usage to make calculating costs easier, and also as a backup if the ATO come calling.
The biggest area where people fall down is claiming travel expenses for conferences and work trips when they’ve already been reimbursed by their employer.
It can be hard to remember if you were paid back for that business trip you took in September last year, so keep accurate records.
If your employer hasn’t coughed up the payment, you can claim expenses for things used to carry out your work.
Examples are claiming meals with clients, accommodation and taxi fares.
But you need to prove that you only incurred those expenses because you were required to carry out a work activity.
For example, there’d be no reason for you to be in another city if you weren’t required to be there for work reasons.
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You generally can’t claim the cost of working between work and home even if there are side-trips or you have to work outside regular work hours.
Say you have had to stay at work late – you can’t claim the travel going home because it falls outside regular work hours.
You can claim the cost of car travel if you’re going to a second job on the same day, or you’re going to another office for the same employer.
There are some circumstances where carting around bulky equipment for your employer can mean you can claim a deduction.
If you’re claiming car expenses, you need to keep a logbook if your travel comes to more than 5000km or demonstrate a ‘reasonable calculation’ if you’re using the cents per kilometre method (generally for claims under 5000km).
You can find more information on car expenses here.
A lot of professionals will seek professional development, whether that’s a course or a seminar, but there are some important distinctions if you’re thinking of claiming education expenses.
Firstly, you can’t claim expenses for education aimed at getting another job – that’s a personal expense rather than a work expense.
Secondly, you can’t claim expenses for education if your employer has either paid for the course or reimbursed you for it.
Claims can be made where you have: