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Hints & Tips - deductions for PAYG's

Discussion in 'Accounting, Tax & Legal' started by Property WA, 30th May, 2008.

  1. Property WA

    Property WA Active Member

    Joined:
    31st Jul, 2007
    Posts:
    44
    Location:
    Perth, WA
    Hi all,

    Seeing as we're about to hit June - it'd be good to hear what other PAYG employees are looking at claiming this year in their tax return.

    There's the obvious like union fees, car expenses, seminars etc but I'm interested to hear of the out-side-the-box deductions (other than property related)...
     
  2. Rob G.

    Rob G. Well-Known Member

    Joined:
    6th Jun, 2007
    Posts:
    717
    Location:
    Melbourne, VIC
    If I didn't know you better from your posts ...

    ... this sounds like a question from a "Shadow Shopper" of the ATO or some research company ???

    Personally I believe many employees under-claim home office. Increasingly employees conduct work-related duties from home and have do their professional reading and education in their own time.

    Gone are the days of formally training employees. "Plug and Play" is the employers' attitude these days.

    Just remember that for employees, costs of getting employment or opening up a new vocation are not deductible.

    Cheers,

    Rob
     
  3. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
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    Posts:
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    Location:
    Sydney, Australia
    I agree that home office expenses are a worthwhile claim - if you can justify them.

    I had the ATO query my claim for home office expenses last year (when I was still an employee) - but I was claiming 100% of the costs for my office (a percentage of rent, water, gas, electricity, insurance, etc. - based on floor space of the office). I believed it was justified due to the fact that I worked from home full time.

    I think if I was claiming somewhat less than 100%, they may not have complained. I also had other very large tax deductions from some tax planning, which is probably what brought my claim to their attention for further scrutiny.

    They did ask for evidence from my employer to show that I was required to work from home (as opposed to "choosing" to work from home) - which I couldn't provide since I had subsequently left my employer. I thought that was a bit unreasonable to claim that I didn't need to work from home - since I typically spent as much time after hours doing work as I did during working hours. I think in many cases people these days will work a full day at the office and then do quite a bit of work from home after hours.

    Either way I think you should be cautious about such claims - keep them reasonable and justifiable (ask your accountant for guidance on what is reasonable).

    If in doubt, a letter from your employer is good - perhaps draft a letter for your manager (with your accountant's help) and ask nicely if they will print it on letterhead and sign it for you.
     
  4. Rob G.

    Rob G. Well-Known Member

    Joined:
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    Location:
    Melbourne, VIC
    I agree with the caution since work-related deductions are a favourite audit target of the ATO.

    Maybe you needed the letter from your employer saying you were "required" to work from home because of the 100% claim.

    You can still work from home some hours out of convenience based on Case Law, and the Commissioner's view is given in TR 93/30.

    How many people can find a quiet couple of hours at work to read journals and get up to date on the latest developments !!!

    Even locking the door and placing a "do not disturb" sign fails. I have even had timed voicemail calls interrupt me when I resort to getting to work at 6.30 am to avoid the incessant "consultation" or impromptu meeting callers who can never take a decision on their own.

    Cheers,

    Rob
     
  5. Property WA

    Property WA Active Member

    Joined:
    31st Jul, 2007
    Posts:
    44
    Location:
    Perth, WA
    Thanks Rob & Sim,

    Very interesting points.

    Think i'll look at getting a letter like that from my current employer just in case.

    And no... definately not a shadow shopper (though I did just race over to Myer and have a sneeky peek at the end of FY sale that starts tommorrow)
     
  6. Rob G.

    Rob G. Well-Known Member

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    6th Jun, 2007
    Posts:
    717
    Location:
    Melbourne, VIC
    Don't forget to put the extra office hours in your diary this month as you retrieve statements and do the spreadsheers for you tax return !!!

    Cheers,

    Rob