The three rules for claiming work-related expenses
Taxpayers who are over-claiming work-related expenses (e.g. vehicle, travel, internet and mobile phone and self-education) are on the ATO’s hitlist.
Although a myriad of issues are involved when claiming work-related expenses, the main three rules are:
- Only claim a deduction for money actually spent (and not reimbursed);
- The work related expense must directly relate to the earning of income; and
- An employee must have a record to prove the expense.
For example, a claim for work-related expenses would not be allowed if deductions are claimed for private expenses (e.g. travel from home to work and not required to transport bulky equipment), reimbursed expenses (e.g. an employee is reimbursed for the cost of meals, accommodation and travel) or if no records are kept.
Other practical issues to consider when claiming work-relates expenses include:
- When claiming work-related expenses relating to a vehicle, travel, internet, self-education or a mobile phone, taxpayers should ensure that the amount claimed for these expenses is reasonable and verifiable because the ATO is using real-time data to compare deductions claimed by taxpayers in similar occupations and income brackets to identify higher-than-expected or unusual claims;
- When claiming deductions up to $300 (allowable without a receipt), taxpayers must still be able to substantiate the deductions claimed (if ever queried by the ATO);
- When claiming deductions for work uniforms, taxpayers should ensure that they only claim for uniforms that are unique and distinctive (e.g. those uniforms with the employer’s logo and specific to the taxpayer’s occupation) and not clothing for everyday use (e.g. plain suits worn by office workers).
Superannuation rates & thresholds for current year
Fundamental changes have been made to the superannuation landscape from 1 July 2017 (i.e. the current income tax year).
Below is a short summary of the most important superannuation rates and caps that apply for the current income tax year:
Please speak to your authorised Nexia representative if you are not sure what all these numbers mean or what superannuation strategies may be best suited to your circumstances. For more information on these changes also please see our Superannuation Update here.