Since the cost of leaving your front door — and even just sitting in your own house, to be honest — has gone through the roof, you might be hoping you’ll be able to claw a little back at tax time this year.
Not so fast, the Australian Taxation Office has said. The ATO has issued a warning today that working from home expenses will be scrutinised more thoroughly this year and that anyone seeming to claim above the average may face a review or an audit.
The ATO’s assistant commissioner, Tim Loh, has told the ABC that people who claim more than they should on work-related expenses, COVID-related expenses, rent reductions, and crypto investments are going to be looked at hard this year.
Similar areas were targeted last year, however, this year it’s going to be harder to claim working from home expenses given many of us are largely back to work. The ATO’s quick ’80 cents per hour’ calculation for working from home-related expenses will however apply to 2021-2022 tax filings, so if you stick within this limit, you should be alright.
“If you’ve been working, so you know, full-time at home for, say, 48 weeks of the year, that can work out to the deduction [being] about $1,500,” he said.
The average tax claim is about $3,000 per year and collectively Aussies claim about $20 million in work related-expenses annually. This increased by around 40% during the COVID pandemic, given more of us are working from home, however, the ATO also expects that other work expenses, like travel, will drop.
Loh has previously warned that the ATO uses algorithms to detect when people might be trying to game the system.
“When it comes to hiding income from the ATO, this isn’t a game of Monopoly where you can roll the dice and avoid the income tax box,” he said.
“We get data from a range of sources, and we use our analytics tools to run our eyes over that data and look out for where people aren’t declaring their income or are overstating their deductions. One of the areas we focus on is lifestyle assets — whether that’s a boat or a luxury car or a piece of fine art.
“If someone isn’t declaring all their income in their tax return, then we’re going to be asking questions pretty quickly.”
Each year, the ATO chooses certain expense areas to scrutinise and will audit people who over claim in them. Last year it was car expenses and dry cleaning expenses for uniforms, given that people likely didn’t need to be dry cleaning uniforms if they were working from home.
While being reviewed or audited by the ATO is rare, it’s important you have all the documentation required to back up your claims, or you’ll have to pay some of your claims back.