Will Your Claims Stand Up Against The ATO?

On a slow Friday towards the end of the financial year, you’ll typically find professionals across all industries looking into their records to see what can be claimed as work-related expenses. While the criteria remains the same, expenses will be more closely examined going forward so lean in and refresh your understanding, or risk a chat with the ATO. 

Back to basics – what are work-related expenses?

Work-related expenses are costs that are paid by you which have not been reimbursed by an employer or other entity. Additionally, the expense must be directly related to your work and income generation, with appropriate records to support. Claims that do not exceed $300 can be made without records and receipts, although you may be required to explain how you came to that amount if it’s flagged by the ATO.

What sort of work-related deductions are you eligible to claim?

So let’s find out what sort of claims are on the table, and what might not be worth trying to get over the line. The following deductions are able to be claimed, provided they are directly related to your work:

Vehicle and travel expenses
Tread carefully here, because vehicle expenses do not cover your daily commute. Rather it pertains to site visits, offsite meetings and other travel that is outside of your typical role.

Clothing, laundry and dry-cleaning expenses
Unfortunately, your next shopping spree is not claimable, unless you have a prescribed uniform that has required a purchase and further laundry maintenance over the tax year.

Home office expenses
These items will play a role in allowing you to conduct your work at home, from the infrastructure to stationary items. It’s always an idea to keep receipts if these items have dual-purposes and might need some explanation.

Self-education expenses
Additional, value-adding education expenses can be claimed if they relate to your industry and can assist with your current role requirements. If you work in marketing and are about to take on managing the social accounts of the business, then a social media course is a claimable self-education expense. Comparatively, if you carry an administration role and have taken some public speaking training on the side, don’t expect to sneak this one through as you will not be able to substantiate that this is relevant to your role.

Other work-related deductions
These expenditures can be anything from conference registration through to meals consumed on a work trip or meeting. Keep all receipts and record everything, because you will be eligible to claim those odd bits and pieces.

Tools, equipment and other assets
The calibre and volume of tools and equipment needed will vary from industry to industry. For many, there will be no expenses required. Other professionals will require industry tools (cameras, software, etc). It’s good practice to make note of a demonstration of work versus private use percentage in case you need to provide. You can also claim interests paid to borrow money to purchase these tools, if that applies.

Other claimable deductions

Even in 2019, taxpayers are still learning that there are other claimable deductions beyond the one-off payments here and there. Super contributions, income protection and charitable donations are also claimable if taxpayers meet the eligibility criteria.

Super contributions

Super contributions made within the financial year may be able to claim a tax deduction on their after-tax contributions, provided contributors are eligible. If contributors are over the age of 65, a work test will need to be undertaken to ensure voluntary contributions are not made in addition to being gainfully employed (working at least 40 hours over a period of no more than 30 consecutive days).

Income protection

Income protection policies can also be claimed, as long as they are separate to your superannuation. If you’re considering income protection but unsure whether to include it within your superannuation package, you may want to consider a separation protection package for the sake of claiming.

Charitable donations

No one donates to a charity to earn anything back, although it’s a reality that many of us could be doing just this. Now before you buy a ticket into the next home lottery, remember that an eligible charitable donation claim is one that is a ‘gift’.

If there are a few work-related claims you hoped to slip by the ATO, it might be time to revise that strategy and instead claim eligible expenses. This refresher might even have the opposite effect and give you some ideas on what value-adding training and expenses you can explore to complement your existing role, or help you climb the ladder quicker at your place of employment. The good news? There are other things you can be claiming like super, income protection and charitable donations.

If you would like to discuss your tax options, or gain some clarity on the more tricky elements that come with claiming your work-related expenses – we’re here to help. At Catalyst Accountants, we have helped thousands of individuals claim their tax to get the best outcome possible. Book an appointment, and find out what you should be seeing on your tax return.