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Tax office to crackdown on work claims

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August 10, 2017

AS YOU lodge your tax return this year, be warned.

The Australian Taxation Office is increasing scrutiny on work-related expenses. Assistant Commissioner Kath Anderson said last year more than 6.3 million people made a work-related expense claim for clothing and laundry expenses, totalling almost $1.8 billion.

‘‘We have seen claims for clothing and laundry expenses increase 20 per cent in the past five years,’’ she said. ‘‘While this increase isn’t a sign all of these taxpayers are doing the wrong thing, it is giving us a reason to check.’’

Ms Anderson said common mistakes the ATO had seen included people claiming ineligible clothing, claiming for something without having spent the money, and not being able to explain the basis for how the claim was calculated.

‘‘I heard a story recently about a taxpayer purchasing everyday clothes who was told by the sales assistant they could claim a deduction for the clothing if they also wore them to work,’’ Ms Anderson said.

‘‘This is not the case. You can’t claim a deduction for everyday clothing you bought to wear to work, even if your employer tells you to wear a certain colour or you have a dress code,’’ she said.

‘‘For your clothing to be eligible for a deduction, it needs to be occupation-specific clothing, protective clothing or a uniform that is unique to the organisation you work for.’’

Ms Anderson said three golden rules will help taxpayers get their deductions right.

‘‘One, you need to have spent the money yourself and can’t have been reimbursed; two, the claim must be directly related to earning your income; and three, you need a record to prove it,’’ she said.

For more details about work-related expenses, visit ato.gov.au/deductions

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