How not to get caught out at tax time!

The ATO has provided updated guidance on the deductions they are targeting and the requirements to claim deductions. Here are some handy tips to remain compliant while claiming deductions:

• Make sure it makes sense – Make sure your deductions relate to your work, and that the deductions make sense to your work conditions. For example, if you are claiming deductions for working from home full time, it wouldn’t be appropriate to also claim travel expenses. This is one of the red flags the ATO looks for in this financial year.
• Make sure if it’s not for private use: Don’t claim personal expenses against your income. While some things may be convenient for your work, they may also be considered a private expense. If ever you are confused, please don’t hesitate to contact us or any tax professional.
• Keep your receipts! Even if it is just a photo on your phone. You have to keep receipts for 5 years in case the ATO ever wants to review your tax return.

 

The ATO has it’s three golden rules that we strongly encourage that you follow:

• The money has to be spent, and not reimbursed
• The expense must be directly related to your income
• There has to be a receipt

Tax time is daunting, and it’s only around the corner again. It’s always best to prepared earlier rather than later. Get in touch and we can help you get prepared to make the most of tax time!