From edible G-strings to puppies and extravagant holidays, people’s creative tax deductions never cease to amaze us. As accountants who crunch numbers all day, we certainly appreciate the creativity. However, the Australian Tax Office (ATO) doesn’t have a sense of humour when it comes to outrageous tax deductions. Indeed, if you make any of the claims below, you may find yourself in the decidedly unfunny situation of being audited.
To help you stay on the right side of the ATO while still maximising your tax return, here’s a quick list of claims that will most likely backfire on you.
Tax Deductions You Probably Won’t Get Away With Claiming
1. Dinner while travelling
This is a tricky one to claim unless you were required to work away from home overnight. If you think your meal expenses qualify, make sure you keep receipts. Also note that you’ll only be able to claim a certain amount based on your income.
2. Working holidays
If you took a work trip that included personal travel, you can only claim the work-related portion. This can be tricky to parse out, so we recommend working with a qualified tax accountant if you’re partial to a working holiday.
3. Your suit or work clothes
You can only claim work clothes if there is a logo on the item. You may need to wear a suit or corporate attire in your line of work, but if it’s not a branded uniform, you won’t be able to claim it.
4. The full dry-cleaning or laundry rate
Unless you can prove how you calculated the cost, it is more likely you’ll need to apportion work and personal clothes in the load. Failure to account for personal use is a quick way to put yourself at risk of an audit.
5. Uni fees or courses
Unless you require ongoing education for your current role, you likely won’t be able to claim back education fees. Unfortunately, investing in yourself for the future doesn’t count.
6. Your whole phone or internet bill
As with your laundry expenses, you’ll need to apportion the personal and work-related parts of your home phone, mobile, and internet costs. You’ll also need to back up your breakdown by providing bills, a diary, and other relevant records.
7. Travelling from home to work
Generally, you can’t claim a deduction for these trips because they’re considered private travel.
8. Car expenses for transporting bulky tools or equipment
These expenses aren’t claimable if you’re carrying the tools simply because it’s convenient. If this is just how you prefer to do things, the cost is a private one, meaning you can’t claim it as a tax deduction. There are, however, some exceptions. You may be able to claim a tax deduction for transporting bulky tools or equipment:
a. You need to use those bulky tools to do your job;
b. Your employer requires you to transport this equipment;
c. There is no secure area to store the equipment at work.
Note that, as with other claims, you’ll need to back this one up with evidence. For bulky tools, you’ll need:
- Proof that they are indeed essential work items;
- Details of the size and weight of all the tools;
- Evidence that your employer did not provide secure storage at the workplace.
DOWNLOAD THIS ARTICLE: 8 Deductions you probably won’t get away with claiming
How do you know what you can claim as a tax deduction?
Wondering what you can claim back on tax? We’ve got you covered. For a quick but comprehensive overview, visit our complete guide to tax deductions. You can also keep yourself up to date by following ITP on social media and reading the latest posts on our blog. To take all the hard work out of maximising your deductions and improving your tax refund each year, get in touch with us today. We’ll set you up with a friendly accountant in your local area who can perfect your tax return and make sure you keep as much of your hard-earned money as possible.
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