Tax time: ATO cracking down on work-related expenses

ATO cracking down on work-related expenses | MWM Advisory

The Australian Tax Office (ATO) has sounded a warning to individuals that it will be closely monitoring work-related expense claims this financial year.

The department says that it is individuals, and not corporates, who are on the watch list this year, with dubious work-related expenses under the microscope.

ATO Commissioner Chris Jordan said over $22 billion was claimed for work related expenses in FY 2014-15, and although individuals over-claim by small amounts, the impact is likely to be bigger than the $2.5 billion in unpaid corporate tax.

The ATO continues to use real-time data to monitor individuals and uses this data to compare individuals with peers in the same profession and with the same income bracket to identify suspicious claims, particularly for laundry, car costs, travel and education expenses.

So when doing your tax this year, remember the ATO’s three golden rules for claiming expenses:

  • – You have to have spent the money yourself and not be reimbursed by your employer for it
  • – The claim must relate directly to your ability to earn an income
  • – You need to be able to prove you spent the money

With that in mind, here are MWM’s top tips when it comes to tax time…

  1. Keep good records and save your receipts

Instead of wasting your time (and your accountant’s) come tax time, keep good records and save your receipts in a logical manner throughout the year.

If you drive a lot for work, it’s important you keep a logbook of your trips. MWM’s app makes it easy for you to do this.*

This will save you time and effort when it comes to doing your tax.

It will also ensure your butt is covered if you’re ever queried by the ATO on your expense claims.

  1. Declare your income properly

It’s vital you declare all forms of your income, or you’ll risk a knock on the door from the taxman.

This includes your employment income, super pensions, government payments, investment income, business/trust income, foreign income, crowdfunding income and any discounted shares under employee share schemes and the like. 

  1. Visit your accountant

It can seem more convenient to do your tax yourself but it’s really important that you visit your accountant to help you with this process.

Your accountant will be able to identify opportunities where you can claim legitimate expenses and any areas that raise a red flag.

Call MWM Advisory on 07 5596 9070 today.

*Download the app from the app store for iPhone or from Google Play for Android. Just search for ‘MWM Advisory’.

Celebrate the End of Financial Year with your team and ours

Celebrate the End of Financial Year with your team and ours

The End of Financial Year (EOFY) is upon us. For business owners, like you and I, there are many moving parts to be aware of. There are yearly financial statements to create, taxes to pay, deductions to claim, and documentation to submit to the ATO.

30 June is coming – what’s your game plan?

30 June is coming – what’s your game plan?

End of Financial Year Tax Planning. While Covid-19 and the uncertain business landscape it created made planning difficult, what we can say with certainty at MWM is that in our experience those who had a plan have navigated the past two years more successfully than those who didn’t.