It is important to understand what you can claim as the Australian Tax Office closely scrutinises work related deductions, writes Adelaide accountant Kym Nitschke.

What is a work-related expense?

Before attempting to claim a work-related expense, it is important to understand how a work-related expense is defined. In a nutshell, a work-related expense is a cost you incur while performing your job.

According to the ATO, you must be able to show that work-related expenses were incurred in the course of gaining or producing assessable income, and are not losses or outgoings that are of a capital, private or domestic nature.

Examples can include:

– Work-related expenses for using a car that you owned, leased or hired under hire-purchase

– Travel expenses you incur that are directly related to your work, such as tolls, taxi fares, parking fees and more

– Meal, accommodation and sundry expenses you incur while away overnight for work

– Tools, equipment, books and trade journals

The ATO looks closely at travel claims, in particular. Specifically, attention will focus on claimed travel expenses that are in fact for private purposes, such as the commute from home to work.

The ATO also investigates claims that have already been reimbursed by your employer, as well as ensuring that claims are for portions that are work related, not private expenses.

Questions about work-related clothing claims are also common. The ATO will allow claims for occupation specific clothing items that are not for every day use (such as checked pants worn by chefs), protective clothing, uniforms and the costs associated with cleaning these clothes.

However, you cannot claim the cost of purchasing or cleaning other plain clothes worn for work, even if your employer requires that you wear them.

Of course, it is important to have written proof of your work related expenses, so make you gather and keep your receipts and any other information to support your claim.

As you can see, the ATO is very strict on work related expenses and you should seek the advice of an experienced tax accountant for your claims.

On the other side of the coin, there are other work related expense claims that many workers are unaware of. It is the job of your accountant to advise you on your entitlements and help you get the best tax result possible.

At Nitschke Nancarrow, we’re happy to help. Call our Adelaide office on (08) 8379 9950 or send me an email.

For more information about deductions, visit the ATO’s website.

– Kym Nitschke, Managing Partner

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