As per the Australian Taxation Office, the data of tax returns for the financial year 2019 – 20 was reported to be approximately $19.4 billion in work-related expenses. Also, an update issued by the ATO reveals that the 2021 data should reflect a decrease in work-related claims.

With the proposed changes in working conditions, there are certain expenses that companies and individuals may not be able to claim, especially in terms of work-related expenses. For example, the majority of the working individuals have been working from home and are ineligible to claim travel expenses. Although, circumstances, where individuals in professions have been required to travel, will be needing to provide proof of evidence.

What is a work-related expense?

An expense incurred “directly” towards your client or employment. Some of the basic examples include travel expense, occupational uniform, and dry cleaning.

What are the rules or criteria for claiming work-related expenses?

As per the ATO guidelines, there are three underlying criteria that an individual must satisfy:

1. The expense must “directly” relate to your income.

2. The expense was made by the individual and not reimbursed for the expense.

3. There must be proof of evidence or a record to prove your claim*.

Is proof of evidence required for a minor work-related expense?

As per the ATO requirement, individuals must provide written evidence, if their total claims exceed the $300 mark by ATO. The proof of record provided must prove the total amount and not just over $300.

What are the requirements of claims that fall under the $300 requirement?

No written evidence is required. However, in special circumstances, the ATO will require an explanation to declare the claim to be “reasonable” and “directly” related to the individuals work.

What are some of the personal expenses that cannot be claimed by taxpayers?

Even if an individual taxpayer was required to adapt hybrid working requirements such as working from home and office. They are ineligible to claim expenses for tea, coffee, lunch, toilet paper.

As per the provided ATO insights, taxpayers will NOT be able to claim mortgage interest, rent and property-based insurances.

*Please note, any false claims made can result in serious penalty and may affect your income tax status for the long term.

Still not sure, if a certain expense is eligible for tax deduction?

Speak to our qualified tax accountants for a more accurate review of your 2021 tax returns.