The Australian Taxation Office (ATO) is closely examining expense claims relating to work and laundry of taxpayers submitting their 2017-2018 tax returns.
The ATO says that clothing claims are nearly 20% over the last five years. People are either making mistakes or deliberately over-claiming. Common mistakes include people claiming ineligible clothing and claiming for something without having spent the money. Some also don’t know how to explain the bases for the calculations.
“Around a quarter of all clothing and laundry claims were exactly $150, which is the threshold that requires taxpayers to keep detailed records. We are concerned that some taxpayers think they are entitled to claim $150 as a standard deduction or a safe amount, even if they don’t meet the clothing and laundry requirements“, says Assistant Commissioner Kath Anderson.
While the announcement focuses on clothing, it’s very clear that the ATO is paying close attention to expenses relating to work. One should always have an evidence- just in case the ATO decides your claim requires close scrutiny. The ATO has queries and challenges very small deduction amounts.
What can I claim?
You can only claim a deduction for the cost of buying and cleaning:
- Occupation- specific clothing like the checked pants chefs wear.
- Protective clothing- sun-protection clothing, steel-capped boots, and aprons (among others) you wear to avoid damage or soiling to your ordinary clothes.
- Unique, distinctive uniforms- clothes that are not publicly available- like company shirts with the company logo.
Please note that you might have to prove your clothing and laundry expenses for claims worth $150 and above.