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ATO issues warning on unusually high deductions

Posted by Northadvisory on October 25, 2016

The ATO has issued a warning that they are paying extra attention to taxpayers claiming higher than expected deductions for the 2015/16 income year.

Assistant Commissioner Graham Whyte stated that the ATO’s ability to check work-related expense claims has become more sophisticated through use of technology and data analysis. The ATO notes that taxpayers using myTax to lodge their returns will receive a real-time warning if their claims for work-related deductions are unusually high compared to other taxpayers in similar occupations, and recommends that in future income years taxpayers use the myDeductions tool in the ATO app to record their expenses to avoid the problems of lost or faded receipts.

As a general guide, the ATO have provided the following advice whereby taxpayers should ensure:
their claims are justified;

1. they have not already been reimbursed for the expenses by their employer;
2. they are getting good advice from their tax agents;
3. they have evidence to support their claims;
4. the claims are related to their work;
5. they know what is and isn’t deductible, and
6. they back up their data.

If you have any questions or enquires regarding your work-related deductions, please contact:

Norman Ruan
Accountant
T: 02 9984 7774
E: normanr@northadvisory.com.au

Martin van der Saag
Director
T: 02 9984 7774
E: martinv@northadvisory.com.au