Avoid double dipping on your deductions
Taxpayers are reminded not to make the mistake of ‘double dipping’ on deductions (that is, claiming expenses twice) in their tax return this year.
Some of the ‘double dipping’ mistakes commonly made relate to the following deductions:
• Working from home expenses
A common mistake involves using the ‘shortcut method’ to claim working from home expenses and then claiming additional amounts for expenses such as mobile phone and internet bills, as well as the decline in value of equipment and furniture.
The working from home shortcut method is all-inclusive.
There are three methods available to claim a deduction for working from home expenses depending on individual circumstances; namely, the shortcut, fixed rate and actual cost methods.
The method that gives the best outcome can be used, as long as the eligibility and record-keeping requirements for the chosen method are observed.
• Car expenses
A common mistake involves using the ‘cents per kilometre’ method to claim car expenses, and then double dipping by separately claiming expenses such as fuel, car insurance, and registration.
The cents per kilometre rate is all-inclusive and already covers decline in value, registration, insurance, maintenance, repairs, and fuel costs.
• Reimbursed expenses
Taxpayers cannot claim expenses that have already been reimbursed by their employer.
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If you have any questions or would like to speak to one of our professional business and tax advisors, please contact our office on (08) 9392 7600 to make a booking or click here.
With three offices across Western Australia and over 20 years of experience, Muntz Partners is a dynamic team of highly trained and skilled individuals committed to providing innovative and effective advice, excellent service and maintaining only the highest standards in ethical professional practice.
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