By Jenny Butler.

CQU Lecturer in Taxation Law.

The Australian Taxation Office (ATO) has stated it will be looking closely at work-related deductions again this year, with a particular focus on claims for mobile phones and home computer usage. The ATO has experienced a large increase in work related claims and wants to ensure that taxpayers are only claiming what they are entitled to.

The first rule that you need to consider when making a claim for work related expenses is that the outgoing must be incurred in gaining your assessable income. In everyday terms, this means that the expense must have a legitimate connection with your work. In the case of an audit the ATO will want to know how you worked out the percentage of the expense that related to work.

This is particularly what they are looking at in relation to mobile phones and computers. In the case of fixed line phones and mobile phones that are not prepaid it is simply a matter of going through your bill and marking off calls that were made for private purposes and those that were made for work purposes. However, where you are seeking to make a claim for work related computer usage on a home computer or for a pre paid mobile phone the best method is to use a diary to work out how much time you spend on the computer and how much of that time is spent for work purposes. This diary can be kept for four weeks and will allow you to calculate an appropriate portion of the expense to be claimed.

Uniform expenses are available to those who wear the CQU corporate uniform. In addition to that the cost of laundering the uniform is also a deductible expense. The ATO generally accepts that a reasonable cost of laundry is $1 a load, on the basis that you launder the uniform separately from your other clothing. The deduction for laundry expenses is allowable without substantiation, as long as it is less than $150. This is separate from the limit of the $300 work related deductions that are allowed without receipts.

Self-education expenses may be an applicable deduction for some people if they relate directly to your job. However, they are not available to those wishing to open up a new area of income earning activity. The major expenses that are deductible as self-education expenses are those in relation to textbooks and tuition fees.

There is a provision for work related deductions under $300 to be claimed without receipts. However, in the case of an audit you are still required to have a reasonable basis for making these claims. This is best done by diarising these expenses. In the case of work related claims totalling more than $300 you are required to keep receipts for all expenses, as well as any records that explain your basis for apportioning the deduction between private and work usage.

Returns are due in by the October 31, 2003. If you wish to be placed on an extended lodgement program with a registered tax agent, you will need to become a client before this date. Tax pack is now available at newsagents and e-tax is also now available at www.ato.gov.au for use in preparing your returns.

The general message for this year is beware. Now that the GST settling-in period is behind us, the ATO are on the prowl for those who are seeking to claim high amounts of work related deductions so if you are going to claim for these make sure that you are able to substantiate them in the event of an audit.