Work-related expenses in the firing line

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Work-related expenses in the firing line

With the 2015 tax season in full swing, the Tax Office has indicated they will be paying close attention to work-related expenses and the associated tax deductions. This is not at all surprising as this area makes up about 19.5 billion in deductions each year. Our professional tax advisors here at Hillyer Riches don’t want you to be a target, so we’ve put together a few important things you might want to know.

In the past, the tax office has focused on expenses made by specific professions, such as pilots or real estate agents. This year however they have made it clear they will be focusing on “high risk” expense claims instead of targeting a certain profession.

This is clearly laid out in a recent webpage called “Building Confidence” and is a welcomed improvement to the tax website. The tax office plans to announce compliance concerns on a regular basis to keep tax payers more informed.  

Some of the areas of expense deductions the tax office plans to target include:

  • Overnight work travel

  • Transportation of bulky tools and equipment between home and work

  • Work use of computers, phones and electronics

     

Overnight Travel

As a general rule, employees can claim travel expenses IF:

  • Their employer requires them to do work away from their usual place of work for a short time and

  • It would be unreasonable to return home and they must stay out of town while they perform the work.

The tax office considers “business travelling” as long as the period does not exceed 21 days. Some employers include a travel expense or allowance to help pay for accommodations and meals. It is important to note that the expenses must be actually incurred and paid for before it can be claimed as an expense.

 

Transportation of bulky tools or equipment

Generally, you are not allowed to deduct expenses of travel from home to work, although there are a few exceptions. If you are required to carry tools or equipment to and from work and certain requirements are met, you may be able to claim this as business travel.

The tax office explains it in these guidelines:

  • A deduction is not allowed if your employer provides a secure storage space at your place of work.

  •  If the equipment is carried for a matter of convenience or personal choice, a deduction is not allowed.

  • A deduction may be allowed if the costs to transport the equipment is not merely private travel between home and work and is required by your employer.

  • The tax office will also take into consideration the bulkiness of the equipment and could be a factor in determining the deductibility.

  • The deduction may be allowable if the expenses to carry the bulky equipment is a reflection of the practical necessity to have the tools available at the work site.

Computers, phones and electronics

Many people have personal phones, laptops, tablets, and work phones, work computers, and other devices. Separating the work expenses of shared items can be confusing and a target when it comes to deductions.

As a general rule of thumb, an individual can claim expenses incurred in relation to the extent that it relates directly to employment. Keeping accurate records, receipts and call logs are highly advised and necessary to claim the business portion of the expense. For more information contact our accountants in Caulfield.

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Disclaimer:

Hillyer Riches Management Pty Ltd , accountants and advisors located in Caulfield, is a Corporate Authorised Representative (No 466483) of Capstone Financial Planning Pty Ltd. ABN 24 093 733 969. AFSL / ACL No. 223135.This document contains general advice only and is not personal financial or investment advice. Also, changes in legislation may occur frequently. We recommend that our formal advice be obtained before acting on the basis of this information.

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