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Hitech eyes on your workrelated tax deductions

WORK-related tax deductions will receive extra attention this year as the Australian Taxation Office targets employees making suspicious claims.

For the first time, the ATO will be checking peoples deductions in real time as they complete their online tax returns, and warning taxpayers if they seem unusually high.

However, that doesnt mean that people should avoid claiming work-related expenses, and now is the time to start organising things and making last-minute tax-deductible purchases.

Electronic items, books and magazines, tools and equipment are among things to consider this month, and remember that anything costing under $300 can be deducted instantly in full.


You should claim everything you are entitled to no more, no less, says ATO assistant commissioner Graham Whyte.

Generally speaking, if you claim a deduction you need to remember three golden rules. One, make sure you spent the money yourself and were not reimbursed, Whyte says.

Two, make sure its related to your job and, three, you need a record to prove it.

There are plenty of ATO guides available to help people cut through the confusion of work-related deductions, including several occupation-specific guides at


Whyte says the ATO will be paying extra attention to people whose work-related deductions are higher than expected, focusing on car expenses, travel, internet and phone, and self education. Its online my Tax lodgement system is its first line of defence.

If your claims are substantially higher than others in similar occupations, earning similar amounts of income, a message will appear asking you to check them, Whyte says.

The ATO will take a closer look at any unusual deductions and contact employers to validate these claims, so its worth getting things right at the start.

H & R Block director of tax communications Mark Chapman says statistics show that work-related claims have been rising, and the ATOs systems can now instantly compare your deductions with your previous claims and typical claims by other taxpayers like you.

In some cases, the ATO might even tell you before you lodge that youll be audited if you continue to file the claim.


Chapman says the big three areas for work-related deductions are cars, clothing and home office expenses. Make sure your home office claims are correct and can be substantiated, he says.

Accounting firm UHY Haines Norton managing partner Michael Coughtrey says home office expenses including mortgage interest can be fully tax-deductible where the office is a place of business. However, claiming for mortgage interest means youll probably pay capital gains tax on a portion of your home when it is later sold.

Where the home office is merely a convenient place to do tasks that could be performed at the main work location, only a portion of occupancy costs such as light, power and airconditioning will be deductible, he says.

Make sure you can substantiate claims for phones, computer use and internet access, Coughtrey says.

Expenditure on clothing is not tax deductible unless it forms part of a compulsory corporate wardrobe or there are exceptional circumstances, he says.

How to sniff out a bad investment

BAD investments, like questionable body odour, stink.

However, sometimes the dollars signs in our eyes blind them to the stench of a dodgy investment in our nostrils because of one simple reason: we all love to make money.

Apart from pleading for a pay rise or working yourself silly with multiple jobs, the only way to make money is by investing.

There are thousands of opportunities, so how do you spot the stinkers? Here are five handy rules to remember.


If a promised investment return seems too good to be true, it almost certainly is.

The only truly safe investment is cash sitting in a savings account at a bank or credit union, because its guaranteed by the Federal Government. A problem today is that cash is paying peanuts so people are looking for other options.

Anything thats not cash in the bank carries a risk that you will lose some or all of your money. The general rule is the higher the return, the more risky the investment.


If someone phones you with a fantastic investment opportunity, hang up. The best investments dont need to be marketed to strangers.

Beware of spruikers telling you how you can make a fortune by borrowing money in your super to buy an investment property. Beware of anyone urging you to buy into a speculative stock or project, and always ask yourself whats in it for them?

Get rich quick seminars and computer software make more money for the promoters than the people who fork out hundreds of bucks for so-called proven ideas or technology.


Read the fine print on any investment opportunities and ask the adviser how they get paid. Before the Global Financial Crisis some salespeople enjoyed massive kickbacks for recommending products that were not suitable for clients but gave the adviser big financial bonuses.

Sometimes its the fees themselves that make an investment bad. If youre paying more than 1.5 cent in your superannuation, shop around. People charging thousands of dollars for investment advice may be trying to fleece you. Never accept a proposal without comparing its cost with the competition and a friend if possible.


Youll have to do some homework, or pay a trusted investment adviser to do it for you, to work out the broader factors that may turn an investment bad.

Is the property in an area where rising unemployment may hit house prices? Is the companys share price under pressure from foreign competitors invading their turf? How does the Aussie dollar affect things?

Outside influences can play a massive role in determining investment success.


The worst investment can often be the one you dont make.

Being paralysed by fear of losing money, and doing nothing, is no way to get ahead financially. The best way to overcome that fear is to take small steps and invest gradually over long periods of time.

Be prepared to have a crack, but spread your money across a wide range of investments to make sure that when one inevitably goes bad, you wont lose the lot.