Claiming work-related expenses this year?

COVID-19, the bushfires and other natural disasters that occurred across Australia during the 2019-20 financial year, have the ATO reviewing their approach to work-related expenses.

In particular, they are expecting to see a decrease in work-related expenses such as:

• Car use
• Travel and
• Clothing expenses

To claim these items at similar levels to last financial year, you will need to substantiate your claims.

If your usual pattern of work has changed in recent months (e.g. you are now working from home more than you once did), you may need to complete an additional record. But don’t worry. We’ll take you through what you need to do as part of our usual tax return preparation service.

For employees and individuals, download our 2020 Tax Return Checklist. You’ll find it on our Home page.

Claiming Car Expenses

There are several different methods to calculate work related car expenses. But if you use the “cents per kilometre” method, you’ll be pleased to hear the ATO has increased the rate to $0.72 per km for the 2020-21 financial year.

This method of calculating work-related car expenses:

• Allows you to claim up to 5000 km per year, per car
• Uses a fixed per km figure to cover all vehicle running expenses (which includes servicing, registration, insurance and petrol)
• Relies on a log-book or diary entries as proof of km travelled

For straight-forward taxation, accounting and financial advice, you can rely on, call the team at SVA and WPA on 02 8850 0388.