Weird things Aussies claim on tax
HAVING a weekend away for stress relief and a Maltese terrier "guard dog" may seem necessary requirements for your job - but neither are legitimate work expenses that can be claimed against your tax bill.
Each year the Australian Taxation Office (ATO) receives expense claims from workers who either do not know the rules, or do but decide to try their luck anyway. ATO assistant commissioner Kath Anderson says weekend trips and pets disguised as guard dogs are just some of the examples they have come across.
Others include theatre tickets for workers in the entertainment industry, expensive suits for lawyers, conventional clothing that just happens to be worn at work, overseas holidays disguised as work trips or conferences, travel expenses for family members that have been brought along on work trips, and mobile phone expenses despite the employer already supplying the phone and paying for calls.
Andersen says the most common mistake people make, however, is claiming expenses related to home-to-work travel, which can only be deductible in very limited circumstances - just because a worker stays back late or is required to pick up the mail on their way home does not count.
"The simplest way to determine whether an expense is deductible is to follow the three golden rules," Anderson says.
"You must have paid for it yourself and not been reimbursed; it must be directly related to earning your income and not of a private nature; and you need a record to prove it."
Anderson says the ATO has sophisticated systems and analytics to ensure wrongdoing does not fly under the radar and they can detect mistakes, errors and fraudulent claims.
"We try to educate taxpayers and provide tools and assistance to help them to get it right," she says.
"If a claim raises a red flag in the system, the ATO will investigate further and if the claim is incorrect, we will work with the taxpayer to correct it. Depending on their behaviour, we may also impose a penalty."
This occurs if the false or misleading claim leads to a shortfall in tax paid, with the penalty ranging between 25 per cent of the shortfall for failure to take reasonable care, to 75 per cent for intentional disregard of the rules.
"In a small number of cases, we prosecute taxpayers who are determined to do the wrong thing," Anderson says.
Common expenses that can be claimed at tax time include:
* SELF-EDUCATION expenses if a course is directly related to earning your current income, but not for a future career
* CAR expenses associated with work trips, such as travelling between offices
* MEMBERSHIPS of professional organisations
* UNION fees
*INSURANCE for income protection
* NEWSPAPERS and journals relevant to your job
* PHONE expenses if they are work related
* UNIFORM and laundry if you are required to wear a uniform specific to your job, such as if it has your employer's logo on it
* HOME OFFICE expenses if you need to work from home