Work-related clothing and laundry expenses
A focus on work-related clothing and laundry expenses this Tax Time will see the Australian Taxation Office (ATO) more closely examine taxpayers whose clothing claims don’t suit them.
Assistant Commissioner Kath Anderson said,
“Last year around 6 million people claimed work-related clothing and laundry expenses, with total claims adding up to nearly $1.8 billion. While many of these claims will be legitimate, we don’t think that half of all taxpayers would have been required to wear uniforms, protective clothing, or occupation-specific clothing.”
With clothing claims up nearly 20% over the last five years, the ATO believes a lot of taxpayers are either making mistakes or deliberately over-claiming. Common mistakes include people claiming ineligible clothing, claiming for something without having spent the money, and not being able to explain the basis for how the claim was calculated
There are three golden rules to follow which will help taxpayers to get their deductions right.
- – you have to have spent the money yourself and can’t have been reimbursed;
- – the claim must be directly related to earning your income, and;
- – you need a record to prove it.
Taxpayers who can’t substantiate their claims should expect to have them refused, and may be penalised for failing to take reasonable care when submitting their tax return.
To avoid the risk, we recommend taxpayers store clothing and laundry receipts and check their eligibility to make clothing and laundry expenses in their tax return.
More information on clothing and laundry expenses can be found here.
