BMO Accountants is warning taxpayers to take extra care and be sure to get professional advice when it comes to making work-related deductions in their 2016 tax returns.
The recommendation comes after the Australian Taxation Office issued a statement encouraging people to check which work-related expenses they are entitled to claim and understand what records they need to keep.
BMO Partner Kelvin Tyler said there is no point trying to “dodgy up your deductions” as the ATO has the ability to check taxpayers’ deductions in real-time as their return is completed.
“The ATO has methods to data match your claims and deductions against those in the same occupation and income brackets, so if there are anomalies, the ATO may take a closer look.”
He said claiming for car expenses was an area that people should be particularly careful with.
“The ATO has removed the one-third of actual expenses method and 12% of original value method for calculating deductions, meaning only two methods now exist, cents per kilometre and using a logbook.
“Remember you can only claim a deduction when you use your car to perform your job as an employee. Most people cannot claim the cost of travel between home and work because this travel is mostly deemed private,” Mr Tyler stated.
Car expenses aren’t the only area in the firing line, the ATO said it would be paying extra attention to people whose deduction claims are higher than expected such as deductions for travel, internet, mobile phone and self-education.
“It’s essential to keep records and receipts as it is your only proof of your claim and as the ATO tightens the belt, you could be asked to certify your claims.”
“There are different rules for different occupations, so we suggest people use a registered tax agent or qualified accountant to assist them with their tax return. Seeing an accountant not only helps to reassure your claim is accurate but can also help maximise your entitlements on deductions you may not know you are eligible to claim, therefore increasing your possible refund” Mr Tyler said.