Work related expense errors persist

The Tax Office has sent out 226,000 letters to taxpayers regarding incorrect claims for work related expenses in their 2005/06 tax returns.

Common errors anticipated include:

  • self-education expense claims where there was an insufficient connection between the work activities and the education expense to warrant a deduction;
  • car expenses using the cents per kilometre method, with the taxpayer unable to support the claimed expenses;
  • incorrectly claiming the entire amount of an asset purchase rather than calculating the asset’s decline in value; and
  • incorrect calculations regarding the taxpayer’s home office expense.

Tip: The Tax Office continues to carefully review work related expenses. If in doubt, speak to us.

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