How do I prove my work-related expenses to the ATO?
This is a really common question we get from clients with simple and more complicated affairs.
When submitting a tax return you are of course entitled to claim deductions for expenses incurred while working – known as work related deductions.
To be able to claim work related deductions you must meet some simple criteria:
- you must have record to prove it
- you must have spent the money yourself
- you must not have been reimbursed for the cost
- the expense must be related to your job.
Recenently the ATO published a revised guide (
PS LA 2005/7) on how they view what is “acceptable evidence” of each of taxpayer’s total work-related expense claims exceeding $300.
The guide talks about Documents (such as invoices and receipts) that the taxpayer acquires from the supplier must set out the: •
- supplier’s name or business name
- amount of the expense or the cost of the asset, expressed in the currency in which it was incurred
- nature of the goods, services or asset
- day on which the expense was incurred or the asset was acquired
- day on which the document was made out.
If the document does not specify the nature of the goods or the day the expense was incurred, the taxpayer may write in the missing details before they lodge their tax return. They can also use alternative supporting evidence to show this information.
The ATO will also be able to accept records made and stored electronically are recognised as acceptable documents.
Where the documents supplied are insufficient, we may accept the following documents (or combinations of documents) as acceptable evidence of expenses:
- bank statements
- credit card statements
- payment reference numbers (such as BPAY, Post Billpay, PayID, Poli, and so on), combined with bank statements or tax invoices.
The guide even provided a simple flowcahrt that shows what questions an ATO officer reviewing any taxpayer’s total work-related expense claims exceeding $300 will go through to come to a conclusion:
Always remember to prove your purchase MCG & Co can help:
Maximising deductions is key during tax time and substantiating these deductions is part of the job.
Whether it’s work-related expenses or more unique deductions like performance tools or handbags, knowing eligible claims can greatly impact your tax position.
We can guide you through these deductions to ensure you receive the maximum refund possible. Contact us
here to discuss how we can help you.
Any concerns?
If you have any concerns about the impact of the above please contact us
here.
Note: The information contained in this update has been provided as general advice only. The contents have been prepared without taking account of your personal objectives, financial situation or needs.
You should seek advice before making any decision regarding any information, strategies or products mentioned to consider whether that is appropriate to your own objectives, financial situation and needs.
