Work related Deductions for Individual Tax Return 2016


With tax time approaching, it is essential to understand the rules and regulations associated with claiming work related deductions.  As fiscal policy changes, it is the responsibility of the tax payer and tax professionals to stay up to date with changes in allowable tax claims.  The Australian Taxation Office (ATO) assists individuals to better understand their entitlements and obligations when claiming work related expenses and continuously encourages people to check which expenses they are entitled to claim a deduction for.  This ensures people understand what records they will need to maintain through-out the financial year to be entitled to the benefit of a deduction. As Assistant Commissioner Graham Whyte states; “people should be able claim everything they are entitled too, no more and no less.”

Deductions are expenses that you incur in order to generate income.  The primary rules to claiming work related deductions are;

  1. It is related to your job and shares a direct nexus to generating your income. Deductions cannot be claimed for private expenses.  For example, you can only claim work related car expenses if you use your own car in the course of performing your job as an employee or when carrying out your own business. You can’t claim the cost of travel between home and work because this travel is private. If a mobile phone or other piece of equipment is used for both private and work related use; then an apportioned deduction is allowed.
  2. You must incur the expense. A deduction is not allowed if you are to be reimbursed for the expense at some date in the future.
  3. You may be required to provide evidence of the expense. Receipts and other forms of proof of payment should always be kept in the case they are requested by the ATO.

The ATO will take a closer look at any unusual deductions and contact your employer to validate these claims. This new process is not about catching you out, it’s about helping you ensure your claim is correct.

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