I've got a lot of friends who've been making some… questionable deductions the last few years and I'm wondering if anyone has had to justify anything? It sounds like the ATO has been "coming down" on WFH deductions since covid but I haven't heard any horror stories yet. Have you?
Tax Time - Anyone Been Audited since WFH Deductions Became Common?
DryingPan on 18/06/2022 - 18:16
Comments
Hope you're ok mate.
Unfortunately your the kind of target the ATO "likes". The real rorters have expensive lawyers that beat the ATO into submission with long expensive court cases if the ATO so much as looks at them…
Claiming coffee, tea etc. big no no
Claiming a lounge set. Also no.
Though I think the landscape is changing re claiming occupancy costs given lockdowns etc.
Mate got audited last yr… the hell he went through having to provide proof of everything for few years nearly gave him a heart attack.
What triggered the audit?
High-yield investment vehicles.
Im not 100% certain… turned up at his place for a visit, and he was tomato red and stressed and the living room was receipts and paperwork so I didnt stay
What was the outcome?
Havent asked as it was a sore point and he aint in jail.. but he took a week off work to sort it out.
for years he bragged about getting thousands back on tax, he did have a home office, and car and allowance etc
if you use the Shortcut method, you only need to provide your timesheet right?
4 week log generally
That will also give you the lowest return.
The OG shortcut method or the COVID-boosted rate of shortcut method? I found the latter to actually be not too bad and worth saving me the effort/risk.
Shortcut covers what I actually spent and I'm not paying an accountant
I've already worked out my deduction for the year, approx number, but I have everything down to the cent on spreadsheet.
Car Travel Expense (450KM) - $320
Mobile Plan (75% work) - $400
Internet (30% work) - $350
Electricity for Heating, cooling, lighting, equipment ( 8hrs/day, 261 days, $0.28/kWh ) - $1050
Mobile Phone (80% work, deduction over 3 years) - $500
Chair (100% work, deduction over 10years, 20%/yr) - $320
Headset - $295
Speakers - $250All up about 3.5k.
Everything is fairly reasonable I think.. Except for maybe the Speakers.. but hey, its on my work desk and I do use it for work.
200% reasonable?
Not sure what you mean
I think he means the chair. 10years @ 20% = 200%
@brad1-8tsi: It’s declining value depreciation.
It’s 20% of the value each year.
Eg.
Year 1 - 20% of $1000 = $200
Year 2 - 20% of $800 = $160
Year 3 - 20% of $640 = $128
And so on..
Which headset and chair you rocking? (Not a rocking chair but you know what I mean)
'Headset' is a loose definition.. what it really means is my airpods pro.
Chair is Herman Miller Aeron I got for $1590 for WFH, but since its over $300, I have to depreciate it over 10 years, and you can choose a between straight line or declining balance depreciation and I chose the latter.
Why 28 cents instead of the prescribed 52?
52c would cover the cost would allow me to claim $1085 (2088 hrs x 52c) but would not allow me to depreciate any work related furniture.
With actual cost method, $1050 is just for electricity, and I can still depreciate my office furniture, so overall i get more returns.
With actual cost method, $1050 is just for electricity
261 x 28c x 8hrs = $584 claim though??
It’s a Sunday. I could be missing something
@bemybubble: 28c per kW/h.
Computer + lighting + aircon = 1.79 kW/h
1.79 x .28c x 8h x 261d = ~$1050
Wasn't even looking for this info but cheers Mate!
Thankyou for laying that out, v. Helpful.
ato can come down in my ass all they like if i use something for work ill deduct it no worries
ato can come down in my ass all they like
Open door policy?
come find out ;)
Speaking of friends making something questionable and the ATO coming down on such people, I know some friends who took out 20K from their Super re "Covid" while working full-time when that scheme was on, and the ATO didn't care. I wish I took out money too and regret that I was too chicken. Now my Super is going down every week and there's nothing I can do about it. Oh, and the government is taking its tax cut with each contribution, and the Super fund is deducting its monthly fees. 😠
I'm going to start off by saying you don't understand how super works. For people like you - you are meant not to touch it, because if you touch it thinking you're "doing something" (ie withdrawing it personally to avoid a downturn), you are LIKELY disrupting your retirement.
There are myriad reasons why what you've suggested is a bad idea: Taking super out once it in is SO bad, when money gets into super it's home safe in a low tax environment. Selling investments on a downtrend is VERY bad and a guaranteed way to loose money.
But even if I take your thesis on face value:
Now my Super is going down every week and there's nothing I can do about it
You can do something about it, allocate your investment to cash inside super. It won't budge a cent. It will also be eaten up by inflation and you'll completely miss out on future growth.
Anyway don't touch your f ucking super unless you know what you're doing or I'll have to pay for your retirement.
And what about those who have no next of kin, with low life expectancy, with chronic illness and need money now? No one in my family reached in their 60s, and I have no one to leave money for when I pass away, so wouldn't it be fair to change the system instead of this "one-size-fits-all" one we currently have? Anyway, for a big number of the low income workers (the ones super was supposed to help), we'll be paying for their retirement in one way or another. It's the well-off, those who don't need it, that will take advantage of it. Super might have been invented with good intentions, but it works well for the super funds and the wealthy.
. Super might have been invented with good intentions, but it works well for the super funds and the wealthy.
It actually works incredibly well for the majority of the population. As you mentioned at the start of your post, so that's totally contradictory. As you have demonstrated the majority of the population don't know why drawing out of a tax-advantaged account in a downturn is a bad idea. That's why super exists because people like you try to pull sh it like that.
There are laws in place for what you are describing, if it's true.
and the wealthy.
Yeah if you make more money you have a better life and more options… that's literally the point.
Anyway you said that withdrawing your super to cash would have been a good idea. Even if I take your hypothesis as true, which it absolutely isn't, it's still a terrible way to do it.
If you’re concerned about being audited I suggest you spend a few $ on an accountant. They know the magic numbers you have to fall between, what you can get away with and what you can’t. Good investment I’ve always thought…
I dunno. I had to restrain my account claiming 100% of home internet as a work expense. Fark…
I've been making so little money this year that the ATO would spend more money auditing me than they could possibly collect.