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Australian Tax Office: Aussies who drive for work every day should be worried

Why Australians who drive every day as part of their job should be VERY concerned this tax time?

  • Australian tax office’s Tim Loh hinted at a crackdown on car expense claims
  • He said tax deductions for car use at pre-pandemic levels despite working from home
  • Tax office hard on claiming car taxes as average gasoline price hits record high

Professionals who drive for work could get in trouble with the IRS – or at the very least have to answer some tough questions as gasoline prices hit record highs.

The Australian Revenue Commissioner’s Assistant Commissioner Tim Loh said with more people working from home, his officials would crack down on those still claiming car expenses.

“What we’re seeing is people continue to claim car and travel expenses at pre-pandemic levels,” he told ABC.

‘We do expect that car and travel costs will drop considerably, because if you’ve worked from home, you can’t be in two places at the same time.’

Travel to and from work cannot be claimed as a tax deduction, but gasoline expenses for travel to a work-related task can be filed.

If checked, individuals will have to prove to tax officials that they have used their cars for work, and not just to run errands or run personal errands.

The crackdown is happening as gasoline prices hit record highs, above $2 a litre.

Penalties for lying on a tax return

CAREFREE: 25 percent

RECKLESS: 50 percent

ON PURPOSE: 75 percent

RECIDIIST: 95 percent

Source: H&R Block analysis of Australian tax office fines for over-claiming

The average unleaded price in regional areas rose 10.4 cents per liter last week to 211.3 cents per liter, new data from the Australian Institute of Petroleum shows.

Motorists in capital cities pay even more, as the average pump price rises to 219.3 cents per liter in Brisbane, 220.1 cents per liter in Canberra and 216.4 cents per liter in Sydney.

With the national petrol price of 211.9 cents a litre, CommSec calculated that an average Australian family spent $296.66 a month refueling their car – just below the recent record $297.50 in May.

The monthly fuel bill is up $74.48 from early 2022.

Australians who claimed a rapid antigen test on their tax return also had to prove it was work related and not for personal use.

“With those rapid antigen tests used for work purposes, you have to meet three rules: you must have spent the money yourself and not be reimbursed by your employer,” said Mr. Loh.

Tax office action takes place as petrol prices hit record highs, over $2 a liter (pictured is a motorist refueling in Sydney)

Tax office action takes place as petrol prices hit record highs, over $2 a liter (pictured is a motorist refueling in Sydney)

“It must be related for work-related purposes.”

Filing a tax return also becomes a lot more difficult for home workers.

With Delta outbreaks no longer forcing people to work from home, a convenient fixed hourly rate method will no longer be available as of July 1.

Since the pandemic began in March 2020, professionals have been able to claim a flat rate of 80 cents per hour for their expenses instead of manually adding them up.

The shortcut was supposed to end on June 30, 2021, but the tax office extended it for another year as Sydney and Melbourne were placed in lengthy lockdowns.

Starting the next fiscal year, home workers will have to keep their electricity, internet and phone bills and manually add up their expenses to claim a lower deduction of 52 cents per hour.

The existing 80 cents per hour rule will remain available to those filing their tax returns for fiscal year 2021-2022.

Individuals have until October 31 to file their 2021-22 tax returns.

The Australian Revenue Commissioner's Assistant Commissioner Tim Loh said if more people work from home, his officials would crack down on those still claiming car expenses.

The Australian Revenue Commissioner’s Assistant Commissioner Tim Loh said if more people work from home, his officials would crack down on those still claiming car expenses.

Mark Chapman, tax communications director at tax advisor H&R Block, said those who still work from home should make it a habit to keep their receipts from July 1.

“You don’t want to reach this time next year and you suddenly realize, ‘Oh, I haven’t kept any copies of documentation, so I may not be able to make a claim,'” he told the Daily Mail Australia. †

“It does mean that taxpayers should actually be much better prepared from 1 July.”

As the fiscal year end draws to a close on June 30, the National Tax and Accountants Association held online seminars for tax specialists on Monday to discuss the changes to tax claims and the tax authorities’ stricter action on home office expenses, travel and meal allowances, and depreciation charges. explain vehicles.

What will change on July 1 this year?

According to the outgoing 80 cents per hour method, which working from home can claim a flat rate without manually adding up their expenses

But from July 1, that shortcut will no longer be available

That means those who work from home should pay a lower 52 cents. claim an hourly rate and manually add up their electricity and heating bills related to a given floor space, along with telephone charges and furniture depreciation

The Australian Revenue Agency advises anyone in that position to keep records of all hours worked from home, receipts for all depreciated assets and equipment used when working from home and records of work-related uses of your assets

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