“Every year we see people tripped up by tax time myths. Unfortunately, this often results in slowing their return down when either they or we realise their mistake as the return is processed,” assistant ATO commissioner Karen Foat said.
“Where it doesn’t delay the initial return, it can result in a surprise tax bill later on.”
She said 2020 has a range of new myths that need busting.
“We are concerned that some taxpayers may either accidentally or deliberately double dip by claiming their working from home expenses using the all-inclusive shortcut method while also claiming for specific items such as laptops or desks,” Foat said.
“It’s important to remember that if you’re claiming under the shortcut method, you cannot claim a separate additional deduction for any expenses you incur as a result of working from home.”
According to Chapman, if you’re willing to do the work, claiming your actual expenses rather than using the ATO’s 80c flat rate can result in a deduction that is four times higher.
“A lot of people logging into myTax will just use the flat rate because they’re not aware of how to use the more complicated method, but if you use a tax agent they will do that for you,” he said.
The 80c flat rate is a trade-off between simplicity and value of the claim, he said.
The ATO said every year it sees Australians trying to claim work-related expenses that aren’t actually related to work.
“We have been reminding taxpayers recently that if they are in jobs that require physical contact or close proximity to customers and they had to buy their own hand sanitiser, gloves or masks for use at work, that they can claim these items,” Foat said.
“However, people who aren’t in jobs that aren’t in close proximity to the public or people who have purchased these items for their general use, cannot claim these items.”
That means that if you’re trying to claim hand sanitiser, but you’ve been working from home, you’re going to raise some red flags.
“People also cannot claim for the costs of setting their children up for homeschooling. These costs are private expenses.”
Home to work travel
Unless you’re required by your employer to transport bulky tools or equipment to and from work, and there’s no safe place to store this equipment at work, you can’t claim your commute.
“If you are working from home due to COVID-19, but need to travel to your regular office sometimes, you still cannot claim the cost of travel from home to work as these are still private expenses. Even though you are working from home, your home is still a private residence – it is not a ‘place of business’,” Foat said.
Foat said the ATO regularly sees people believing they’re entitled to a standard deduction of up to $300.
“While you don’t need receipts for claims of expenses up to $300, you must have actually spent the money and be able to show us how you worked out your claim.”