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Those with work expenses included in their deductions have been cautioned against copying last year’s return with changes made to the deductions.
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Avoid copying last year’s return, warns ATO
05 July 2023
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10 minute read
The ATO has warned taxpayers and their agents against copying work-related expense claims used previously as there were several changes to this year’s eligible deductions.
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ATO assistant commissioner Tim Loh said key amendments to this year’s deductions meant individuals could not just replicate their previous returns and those that do would attract the body’s attention.
“When you’re getting ready to lodge, consider the records you have to support your claims this year – don’t just copy and paste your claims from last year, this will raise a red flag for us,” said Mr Loh.
“We want people to get their deductions right on the first go and claim what they are entitled to – nothing more, nothing less.”
The warning comes after approximately 8.6 million Australians claimed almost $21.6 billion in work-related expenses in their 2022 tax returns.
Part of the ATO’s warning surrounded changes to working-from-home deductions as almost 5 million people claimed a working-from-home related deduction last financial year but that number was expected to change with many beginning to move back into the office and businesses introducing office mandates.
“We know a lot of Aussies are back in the office or have hybrid arrangements, so it’s important to consider whether your claims reflect your working arrangements this year,” said Mr Loh.
One of the primary changes to the working-from-home expense claims included an increase to the revised fixed rate method and no longer a need to set aside a home office.
“The revised fixed rate method has increased from 52 cents to 67 cents per hour worked from home, and you no longer need to have a separate home office or dedicated work-space – if you are working from the couch, you can still use this method,” Mr Loh said.
He also reminded those looking to claim bills such as electricity and gas as part of working from home that they need to keep evidence of the expenses such as a monthly or quarterly bill.
“Keeping the records you need to use this method is really simple – records of hours worked from home can be in any form, for example timesheets, rosters, or a diary of the full year,” said Mr Loh.
“If you’ve used your phone and electricity when working from home, you just need at least one bill for each of these expenses.”
Claiming work-related car expenses was another key area the ATO warned individuals against just copying over from their previous year’s return.
The ATO said almost 3 million people looked to claim work-related car expenses last financial year, with the rate increasing from 72 cents to 78 cents, with it including registration, insurance, maintenance, repairs and fuel costs.
“Generally you can claim a deduction for the cost of trips you undertake in performing your work duties, and not for your ordinary commute between home and work,” said Mr Loh.
“The rate is all-inclusive, so be careful not to double dip your deductions by adding these expenses on top of the rate when calculating your deductions.”
The Tax Office said individuals could claim up to 5,000 work-related kilometres per car, however, they must maintain written evidence to show how they worked out the work-related kilometres such as diary records of work-related trips.
The ATO also advised taxpayers the self-education claim has also changed with the requirement to exclude the first $250 of certain self-education expenses removed from the 2022–23 year.
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