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Topics on work-related expense claims (4)

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Car expense continues

  • The ATO challenged the validity of the taxpayer’s logbook and reduced the deductions for work-related car expenses to only allow a maximum of 5,000 km using the cents per kilometre method for the 2012 to 2014 income years.
  • Additionally, the claim for car expenses for the 2016 income year was reduced to nil (at the taxpayer’s request).
  • In taking such action, the ATO contended the purported logbook did not comply with S.28- 125(2) as it contained:
  • multiple inconsistencies indicating the logbook entries were not made contemporaneously (primarily because they were not made at or as soon as possible after the end of the relevant journeys);
  • entries were inconsistent with other documents and information provided by the taxpayer to the ATO; and
  • insufficient descriptions of journeys to enable the entries to be classified as a business journey (e.g., the ATO contended that a description of ‘customer visit’ was not sufficient to identify the journey as a business journey).
  • The taxpayer contended that he had filled out the log book every week, although under cross- examination he accepted that he had made mistakes when constructing the log book by cutting and pasting various excel spreadsheets, despite the fact this contradicted an earlier statutory declaration he had made that the entries in the log book were ‘true and correct’.

 

Other work-related expenses

  • During the 2012, 2014, 2015- and 2016-income years, the taxpayer also claimed other work- related expenses at Item D5 of his Individual ‘I’ tax return including deductions totalling $36,567 for:
  • Home office occupancy costs (being a portion of rent ranging from 25% to 30%).
  • Home office running costs (being a portion of electricity & gas).
  • Telephone and internet costs (claiming 80% was applicable to work).
  • Stationery, printer cartridges and related consumables.
  • Newspapers, journals, magazines and online news subscriptions.

Additionally, in the 2012 income year, additional depreciation claims were made (presumably for home office furniture and equipment).

  • For his period of employment with Amcom, the taxpayer provided a statutory declaration stating that he was:
  • unable to obtain a letter from Amcom stating that he worked from a home office;
  • he was unable to provide diaries as they were kept in MS office that was provided by (and retained by) his employers;
  • he had not been reimbursed for expenses relating to his residence;
  • Amcom’s head office was in Perth (while he was in Sydney); and
  • he had lost many of his receipts for expenses such as stationery, cartridges, newspapers, journals and other consumables as he had moved to a new house a number of times.

 

  • Should you have any queries, please contact Tax Ideas Accountants & Advisers on +61 2 83181545
  • Alternatively, you can book an appointment in our live calendar.

 

Tags: Deductions

Written by Panbo Ye

I help people discover POWERFUL unknowns in Tax Ideas | Wealth Strategies | Retirement Planning | Finance Solutions!

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