Danger Zones

Expense claims that are high on the Australian Taxation Office (ATO) hit list include:

Travel Expenses

Problems arise when people make claims for expenses that they did not actually incur. Typically, this happens when someone receives an allowance for travel but does not spend it (they might stay with family or friends instead). While the ATO publishes some reasonable rates each year for food and accommodation expenses, these only provide limited relief from the full record keeping rules. You cannot claim a deduction for the ATO reasonable rate amount if you spent less than this on food and accommodation.

Motor Vehicle Expenses

The ATO has announced that it will be closely examining claims for work-related car expenses this tax time. Refer to our Blog ATO Alert – Work Related Car Expenses

Self-Education Expenses

Any study you claim as self-education must be connected to the income you are currently earning (either to maintain or improve your specific skills or knowledge) or is likely to result in increased income from existing income earning activities. Merely doing a course while working full time does not make the course deductible. Be careful of excessive claims for travel overseas and luxury courses. You need to prove that these expenses are essential to your current work.

You can no longer claim

If you are a property investor, you can generally no longer claim the cost of travelling to and from your investment property.