Home / Individuals / Articles / Tax deductions - Not always obvious

The things on which you can claim tax deductions are not always plainly obvious. Complicated interpretations of the law make this a difficult area. We often make deduction suggestions to clients that they are completely unaware of. Talking to us about your situation can be very advantageous. That’s the good news.

But at the same time, the ATO is on the lookout for expense claims that are out-of-sync with the norm for particular industries. Highly sophisticated data matching software has enhanced the ATO’s ability to spot “anomalies”. They are looking for expense claims that are higher than “the usual” in the same occupation. They will even contact employers to validate these claims if necessary.

When claiming deductions…

When claiming work-related expense deductions, you must ensure that they are related to your job. Additionally, you cannot have already been reimbursed by your employer for the money spent and you must have records to substantiate the claim.

Here are some things to keep in mind when claiming deductions:
Car expenses: You can only claim a deduction if you use your own car in the course of performing your job as an employee. You cannot claim the cost of travel between home and work. Of particular interest to the ATO is the transportation of bulky tools; the carrying of unnecessary equipment is not a legitimate claim if similar equipment is already supplied by your employer.
Self-education expenses: You may be able to claim a deduction if your study is related to your current employment. Importantly, if you are studying for a potential change of career, this does not qualify for a deduction.
Internet and mobile phone expenses: If you use your own mobile phone or internet for work purposes, you may be able to claim a deduction. If you also use them for personal use, you will need to apportion the percentage that reasonably relates to work use.

You may be pleasantly surprised

These are some of the most frequently misunderstood claim areas; we are continually asked about them. We have written detailed FocusOn bulletins about all sorts of deductions and would be pleased to provide you with them. Also, please ask us about what qualifies for a deduction if you are wondering. You might actually be surprised to find deductions when you did not expect any. The rules are not always as obvious as you might think.


Joshua Morse

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