Work related deductions is an area that has recently been under intense review by the ATO and from what we are seeing in the lead up to the end of financial year, it looks like this will continue in the 2019 – 2020 FY.
The most important thing to remember when making a claim under work related expenses is that you can substantiate any claim you make. This generally means keeping a record of any expense you wish to claim. Other things to remember;
You need to have incurred the expense yourself
Make sure you have not already been reimbursed for it
The expense has to be directly related to your income
For items such as mobile phones or internet, you can only claim the work-related portion of these expenses
It is not a requirement that you keep records of most work-related expenses below $300, however if you claim the record keeping limit for a certain area, the ATO can ask you to explain how you reached that specific amount, so as a general rule of thumb it is a good idea to keep all your receipts for items you intend to claim.
Working from home represents a large portion of work-related deductions. If you work from home sporadically and do not have a dedicated work space, you can generally claim the work-related portion of your phone & internet expenses. If you work from home regularly and have a dedicated and identifiable home office space, you are entitled to claim other items such as;
The work-related portion of your electricity expenses
Decline in value of your office equipment
Other expenses related to the portion of your home that is used for business
The most important thing to remember when working from home is to only claim the work-related portion of any expenses.
The other large area of work-related deductions that is often completed incorrectly is work-related clothing. The cost of clothing and dry cleaning is only deductible if the clothes are occupation specific; ie. uniforms with a logo, protective clothing, chefs uniforms, etc. Clothing you have purchased to wear to work, such as suits, skirts, heels, is not deductible.