Each financial year, the Australian Taxation Office pays special attention to certain work expenses as it attempts to flush out people deliberately rorting the system. In 2015, the ATO adopted a broad targeting strategy to ensure deductions were appropriate. This year, it's going after particular work expenses — and you're probably claiming at least one of them.
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While the ATO checks for all illegitimate claims at tax time, certain expenses are put under the spotlight. This year, the ATO announced it would be targeting rental property owners (e.g. — excessive deductions for rental properties and holiday homes) and expenses relating to cars, mobile phones, broadband and travel.
If you claim any of the above work expenses, it's imperative to keep detailed records and secure the backing of your employer. For example, the ATO expects motorists to keep logs of distances travelled for work and will also contact employers to corroborate expenses. Simply providing a fistfull of petrol receipts may not be enough to satisfy an audit.
In addition to the above, the ATO will also be looking for expense claims that are much higher than other people in the same occupation. If your work expenses are significantly higher than in previous years, you might want to seek advice from an accountant prior to filing your tax return.
Remember: for a work expense to be claimable, you need to have spent the money yourself and not been reimbursed by your employer. Obviously, it must also relate to your job and you need to keep a record to prove it.
If you don't want an unpleasant phone call from the tax man, be honest — and keep your receipts.
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