CANBERRA, Australia — With the end of the financial year on the horizon and at a time when Australians start considering their tax returns, the tax office is warning it will be taking particular note of work-related expenses.
Around 8.5 million people claimed nearly AU$19.4 billion ($15.01 billion) in work-related expenses in their 2020 tax returns.
Australian Taxation Office assistant commissioner Tim Loh says that the Covid-19 pandemic has changed people’s work habits, so he expects their work-related expenses will reflect this.
“We know many people started working from home during Covid-19, so a jump in these claims is expected,” Loh said.
“But, if you are working at home, we would not expect to see claims for traveling between worksites, laundering uniforms or business trips.”
The data analytics team of the Australian Taxation Office will be on the lookout for unusually high claims, particularly where someone’s deductions are much higher than others with a similar job and income.
“We will also look closely at anyone with significant working from home expenses, that maintains or increases their claims for things like car, travel or clothing expenses,” Loh said.
“You can’t simply copy and paste the previous year’s claims without evidence.”
A “temporary shortcut method” for working from home expenses is available for the full 2020/21 financial year.
This allows an all-inclusive rate of 80 cents per hour for every hour people work from home, rather than needing to separately calculate costs for specific expenses.
“All you need to do is multiply the hours worked at home by 80 cents, keeping a record such as a timesheet, roster, or diary entry that shows the hours your worked,” the Australian Taxation Office says.
However, this is only a temporary measure, and for those wanting to claim part of an expense over AU$300 ($232) — such as a desk or computer — in future years, they will need to keep a copy of their receipt.
The Australian Taxation Office is an Australian statutory agency and the principal revenue collection body for the Australian Government. The office has the responsibility for administering the Australian federal taxation system, superannuation legislation, and other associated matters.
The Federal Government of Australia has jurisdiction to tax Australian residents on income from worldwide sources and non-residents on only Australian sourced income.
Australian legislation contains specific rules relating to residency to determine whether an individual or company is a resident for tax purposes.
Australia also has a system for determining whether an income amount is sourced in Australia or another country. Generally, income is sourced in the place of employment or the fixed place of business.
(Edited by Vaibhav Vishwanath Pawar and Ritaban Misra)