Tax Deductions – Be Cautious of What You Claim

Do you consider claiming your phone and Internet bills? If yes, then you better make a deductions list and then check it carefully, because someone will be watching you.

Also, if you want to claim your car and travel expenses, you have to make sure you have proof for them because the tax man will surely want to see it.

Both of these examples are mentioned on the hit list of the Australian Taxation Office (ATO) this year, in order to make sure that Aussies understand what they should claim and what is not tax deductible.

The recommendations of ATO

In 2016, ATO advises Australians to make sure that their tax deductions are legit. After that, they can claim them. Also, they must keep the receipts, because they will need evidence.

Graham Whyte, who is an ATO assistant commissioner, said that Aussies have the right to claim what they were owed, and they should do it. But, they are not entitled to claim more or less.

As it was already mentioned above, phone, travel, Internet and car use expenses are on the hit list. Besides these, Mr. Whyte also talked about self-education, another area where you can ask for tax deductions.

The ATO assistant commissioner says that he understands that the rules regarding tax deductions can be confusing, but he recommends accessing the ATO guidelines. They are much easier to read and they’re also available online.

“Three golden rules”

In order to help people understand tax deductions much easier, Mr. Whyte referred to a few major principles as the three golden rules.

First of all, if you want to make a claim, the amount of money must not have been reimbursed, and it had to be spent by you.

The second rule is to ensure that the expenses are job-related.

And finally, the third rule is to make sure you have proof for all these expenses. Therefore, you need to keep all of the receipts for the goods or services you want to claim.

Pay attention to the new rules

As the rules have changed this year, ATO may ask you to check your claim once again, according to the new regulations.

For instance, if your claims are considerably higher than those of Aussies who have the same job as you and earn similar amounts of money, a message box will appear and you will be asked to check them again.

According to Mr. Whyte, ATO will take a closer look at any unusual tax deductions. Moreover, it will also contact the employers to validate such claims, so you should pay a little more attention from the start.