A Chan & Naylor client was recently subject to Australian Taxation Office, pre-assessment review of work related claims and donations.
The client works for a family owned training company. He claimed a large donation and various work related expenses including home office rent occupancy costs.
The ATO requested documents to support the taxpayer’s claim. An initial phone conversation with an ATO officer, suggested that the ATO would challenge the home office claim. We asked the client to provide copies of supporting documents including a plan of his home and his calculation of work related percentage. The required calculation had been explained to the client prior to our preparation of the original tax return and the taxpayer had correctly calculated the rate. It is important to note that the client’s employer did not provide work office space and the client is required to work from home.
We submitted the information including all supporting documents and calculations to the ATO. The ATO concluded that the claim was justified and no adjustment was made. The ATO also paid the client interest as result of the delay in processing his refund!
A recent Australian Taxation Office report reveals that many taxpayers are making common errors when claiming work related claims. These taxpayers are not receiving correct advice. The ATO suggests that all taxpayers ensure that:
- Your claims are justified
- You account for employer reimbursements
- You obtain correct advice
- You can substantiate your claim &
- Your claims relate to your work
As taxpayer you are encouraged to engage a qualified reputable Accountant to ensure that you receive quality proactive advice about your tax obligations.
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