There is no such thing as a standard deduction – never has been, and now the ATO has turned its sights to the small individual tax payer and what deductions they’re claiming.
Some areas, such as travel accommodation and meals have in the past been a bit of a grey area, open to interpretation, but now (and about time!) the ATO have issued clearer guidelines on these types of claims. What can be claimed, under what circumstances and what substantiation needs to be kept.
Others have been misunderstood and abused – such as the 5,000km cents per km, $150 laundry and $300 ‘other deductions’ claims. You have always had to incur these expenses in relation to your work to claim them.
These may seem like small claims – you might be thinking ‘surely the ATO have bigger fish to fry’. However, their recent audit activity has so far resulted in a recoupment of $1.1billion – no wonder they’re interested!
The moral to the story – keep your receipts, ensure you can substantiate the connection of your claims to your work and use a reputable tax agent that will make the correct claims for you and keep you off the ATO’s radar.
See the full article here.
– Melanie Zander