We’re on the final sprint to the end of financial year, which many of us means filing a tax return and hopefully getting a refund.

Whether you’re using an accountant or preparing your tax yourself, one of the keys to a smooth experience is staying within the limits of what you can claim.

Each year, the Australian Taxation Office (ATO) releases a list of the things it’s targeting from taxpayers. Here’s one of this year’s red flags and how to avoid it.

Incorrect work expenses

Since the COVID-19 pandemic, many of us have shifted our work patterns. Lots of people are working from home either part-time or full-time, which can come with some additional costs.

If you worked from home in the past 11 months and are planning to claim additional expenses related to that, the ATO now requires you to have thorough records to prove it.

“Deductions for working from home expenses can be calculated using the actual cost or the fixed rate method, and keeping good records gives you the flexibility to use the method that works for you, and claim the expenses you are entitled to,” the ATO’s assistant commissioner Rob Thomson said.

“Copying and pasting your working from home claim from last year may be tempting, but this will likely mean we will be contacting you for a ‘please explain’. Your deductions will be disallowed if you’re not eligible or you don’t keep the right records.”

To avoid this ‘please explain’, the ATO advises the following:

• Make sure you spent the money on the working from home expense and weren’t reimbursed for it.
• Make sure the expense directly related to earning income.
• Make sure you keep the receipts.

What you can’t claim

• Things your employer provides – This may include a desktop, laptop or a work phone.
• Things your employer has reimbursed you for – For example, if you paid for a replacement mouse, but your employer gave you the money back.
• Things that relate to your kids’ education.
• Coffee, tea and other similar household items.

Source: ATO; Australian Government.

To find out more, visit the ATO working from home page (here).