The Australian Taxation Office (ATO) is reminding people not to 'double dip' their deductions in their tax returns this year.
Assistant Commissioner Tim Loh said about 8.4 million Australians claimed nearly $19.8 billion in work-related expenses in 2021, which he described as "a lot of deductions".
What can be claimed depends on the type of job, individual circumstances, and whether there are the required records to support the claim.
"While some people make genuine mistakes, we do see people trying to gain an unfair advantage by claiming incorrect or false expenses. A mistake that we often see in tax returns is people claiming expenses twice," Mr Loh said.
"You wouldn't double dip your chip, so don't double dip your deductions.
"Remember, we use sophisticated data analytics to monitor for incorrect information and you risk being audited or penalised for deliberately providing incorrect information."
Some 'double dipping' scenarios are listed below:
Working from home expenses and the shortcut method
A common issue seen is people using the working from home shortcut method to claim their working from home expenses and then claiming additional amounts in their return for expenses such as their mobile phone and internet bills, as well as the decline in value of equipment and furniture.
When the working from home shortcut method is used to claim working from home expenses, it is all-inclusive.
There are three methods available to claim a deduction for working from home expenses depending on individual circumstances, the shortcut, fixed rate and actual cost methods. The method that gives people the best outcome can be used, as long as the eligibility and record-keeping requirements for their chosen method are observed.
Taxpayers can use the home office expenses calculator to help them work out which method will give them the best outcome.
"While the traditional methods require receipts, paperwork and other record keeping, the shortcut method only requires a record of hours worked - diary entries or timesheets will suffice," Mr Loh said.
When claiming working from home expenses using the shortcut method, the amount needs to be included at the Other work-related expenses question in tax returns with 'COVID-hourly rate' in the description field.
If a method other than the shortcut method is used in later years and you want to claim depreciation for an expensive purchase such as a laptop, the correct records for that item must be kept.
"Even if you choose to lodge your tax return with a registered tax agent, it is still your responsibility to make sure the agent has all the correct records," Mr Loh said.
Nearly three million people claimed work-related car expenses in 2021 and one of the most common mistakes was people using the cents per kilometre method to make their claim, and then double dipping by claiming expenses separately such as fuel, car insurance, and registration.
The cents per kilometre rate is all-inclusive and covers decline in value, registration, insurance, maintenance, repairs, and fuel costs. These expenses can't be added on top of the rate when calculating deductions.
The ATO will also be taking a closer look at claims calculated using the logbook method, to ensure they reflect people's circumstances coming out of the pandemic.
Finally, the ATO is making sure taxpayers aren't claiming expenses where they have already been reimbursed by their employer.
"If your boss has reimbursed your dry-cleaning costs for your uniform, but you then claim laundry deductions on your tax return, well you're picking your neighbours' pockets" Mr Loh said.
For more information visit ato.gov.au/deductions