Work Related Deductions – Are They Legit?

By Joe Smith

While the hectic tax season for individual tax returns may be over and accountants give a sigh of relief, the tax returns lodged during this and prior tax years are now in the sights of the ATO.

The top man at the ATO, Chris Jordan, has recently advised a senate committee that random audits have started over the past 18 months which are focusing on workplace related tax deductions. 

So you may be thinking that your tax return claims are only a tiny amount in the scale of things however the total of work related tax deductions in Australia amounted to $22 billion in 2014-15!  And of this total the ATO estimate that $2.5 billion or more could have been paid out in questionable refunds.

One other thing to keep in mind is that while some audits may be random, the ATO have benchmarks for almost every occupation you can think of and these can be used to calculate whether your claims are over these benchmarks which in turn may lead to an audit.  If you do receive the dreaded audit letter from the ATO, if they find the claims to be false or unsubstantiated, you may have to pay back part or all of their refund plus up to a 100% penalty with interest.

With the ATO making it easier to lodge tax returns without using a tax agent, it is arguably also easier for them to recover amounts claimed by taxpayers lodging via MyGov.  If you haven’t received advice from a legitimate tax agent on what can and can’t be claimed, then it may be possible that you have claimed something you are not entitled to claim.  So I would always advise that if you have work related tax deductions totalling more than a couple of hundred dollars you should seek professional advice and lodge through a tax agent.

If you would like to know what can and cannot be claimed for your own specific circumstances then call 4972 1300 to book an appointment with a tax experts at Sothertons Gladstone.