Tax Office targets professionals, executives and tradesmen in 2014

Australia’s leading tax agents, H&R Block, expects that the Australian Tax Office (ATO) will be targeting professionals, executives and tradesmen in 2014.

H&R Block believes these groups will be targeted on the basis of their claims for:

– overnight travel expenses;
– work related use of computers, phones and other electronic devices;
– motor vehicle use whilst transporting bulky tools and equipment required to do their job.

Regional Director of H&R Block, Mr Frank Brass states “These people are heavy users of mobile phones and tablets, while travelling overnight to meetings interstate or on a regular basis. Meanwhile tradesmen will also need to be especially careful in claiming their motor vehicle use for car travel claims because they are carrying heavy tools to jobs.

“The key for the professionals and tradespeople is to ensure that, in making work related claims, they have actually spent the money, have correct records to prove it and demonstrate that the expenses incurred related to their jobs. If they can not tick all of these boxes, they may face heavy penalties”, he added.

Mr Brass observed that the ATO now has very strict record keeping requirements, backed up by highly sophisticated tracking technology.

He expects that there will be a record number of tax audits conducted in 2014, with a strong emphasis on evidence, especially receipts, which back up claims.

H&R Block has prepared a checklist of work related expenses that may be claimed and what records are required to be kept:

– Union or professional dues
Receipts for payments of these expenses

– Self-Education expenses incurred to improve your job skills
Receipts for payments of these expenses

– Uniforms, protective clothing and sunscreen
Receipts for payments of these expenses

– Tools and equipment you purchased and used for work
Receipts for payments of these expenses

– Motor Vehicle use for work.
Bulky tools must weigh more than 20 kg and no secure facility provided at work to store the items. Motor vehicle log books must be kept for 90 days to maximise claims for motor vehicle expenses.

– Use of Mobile Phone for work
Keep the phone receipts and invoices, also keep a log for 30 days to determine the business use.

– Use of Internet for work
Keep the internet receipts and invoices, also keep a log for 30 days to determine the business use

– Use of a Home Office for work
Keep a log of the number of hours and you can claim the set rate per hour allowed by the ATO

– Tax preparation fees
Receipts for payments of these expenses and travel costs

– Investment expenses
Receipts for payments of these expenses

– Contributions to charities
Receipts for payments of these expenses and a log of donations.