Posted on 14/07/2017

Things you can’t claim on your tax return

Things you can’t claim on your tax return

It’s that time of year again – a time that we either love or hate. That’s right, it’s tax time. That means it’s time to get into the nitty gritty of our yearly expenses and work out exactly what we can and can’t claim as deductions when it comes time to put in complete our tax returns.

The ATO has warned taxpayers to avoid incorrectly claiming work-related expenses, saying they will be using real-time data to compare taxpayers in similar occupations and income brackets, which will help identify higher than expected work-related claims.

“It is important to know what you’re eligible to claim before lodging your tax return and to make sure you don’t claim more than you’re entitled to,” Assistant Commissioners Kath Anderson said.

“Many taxpayers don’t have a good understanding of what deductions they can claim, and believe they can claim for items which they in fact can’t. Some taxpayers even think that you can make a standard claim of $300 without having spent the money. You don’t need receipts for claims up to $300 but you must have actually spent the money, and be able to show us how you worked out your deduction if asked.”

Thanks to the ATO, here’s a list of 11 things you most likely can’t claim when it comes to completing your tax return:

  • Trips between home and work. Generally you can’t claim a deduction for these because they’re considered private travel.
  • Car expenses for transporting bulky tools or equipment, unless:
  • you need to use your bulky tools to do your job
  • your employer requires you to transport this equipment
  • there is no secure area to store the equipment at work.
  • Car expenses that have been salary sacrificed.
  • Meal expenses for travel, unless you were required to work away from home overnight.
  • Private travel, so if you take a work trip that includes personal travel you can only claim the work-related portion.
  • Everyday clothes you bought to wear to work (eg, a suit or black pants), even if your employer requires you to wear them.
  • A flat rate for cleaning eligible work clothes without being able to show how you calculated the cost.
  • Higher education contributions charged through the HELP scheme.
  • Self-education expenses when the study doesn’t have a direct connection to your current employment – your future or dream jobs don’t count.
  • Private use of phone or internet expenses – only the work-related portion counts.
  • Up-front deductions for tools and equipment that cost more than $300. However, you can spread your deduction claim over a number of years. That’s called depreciation.

For more information, visit the ATO website or speak to your accountant.