ATO targets dodgy tax deductions ahead of financial year returns

ABC NEWS (Australia)

The Australian Taxation Office says it will be looking closely at returns from Australians with rental properties, including holiday homes, this year.

Transcript

00:00It's one of our most hated to-do items, along with going to our dentist, but tax time is here again.

00:09Each year, about 9 million Australians claim about $28 billion worth of work-related expenses.

00:17Many relate to working from home.

00:19The average claim last financial year was about $3,000.

00:24I'm here at the ATO, and I'm going to be talking to Assistant Commissioner Rob Thompson

00:29about the do's and don'ts of claiming.

00:32Good to see you again.

00:34Tell me, this year, what are you looking for most when people file their tax returns?

00:39So this year we're focused on three things.

00:41Work-related expenses, working from home deductions, and omitted income.

00:46So we're just really wanting to make sure people get their tax return right the first time,

00:51make sure that they've got all the records they need so they don't leave anything out when they file with us.

00:56And sometimes when people do lodge, you still see some outrageous claims.

01:01Tell me about some of those.

01:02So we do see some funny claims.

01:04We had someone this year who tried to claim their engagement ring as a donation on the tax return.

01:10We had a company director claim their treadmill, juicer, coffee machine, I think their gaming console,

01:18and a bunch of other stuff as working from home expenses.

01:21And both of those, they're private in nature and you can't claim them on your tax return.

01:25Last financial year, 4 million Australians claimed work from home expenses.

01:30Why is it such a big number?

01:32And what are you looking for this tax time?

01:34So last year we had 10 million people claim a work-related expense,

01:37and a number of those claimed are working from home deduction,

01:40because people are just working from home as part of their job these days.

01:44So under both methods, there's some record keeping that you need to have.

01:48So whether you're using the fixed rate method, which allows you to claim 70 cents for every hour you work from home,

01:54or using the actual cost method, which is a little bit more complicated,

01:57just making sure you've got the right records.

01:59And there's lots of information on the ATL website about what you do need to keep to be able to claim under either of those methods.

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