Claim tax deductions for technology to rise, but beware the ATO is watching you

A SURGE in people working from home and using technology for work-related tasks has opened the door to a new wave of tax deductions. But it comes with a warning.

TECHNOLOGY and tax deductions are combining to deliver Australians a financial boost, but those who bend the rules are increasingly likely to get caught.

A surge in people working from home and using devices such as mobile phones and iPads for work-related tasks has opened the door to a new wave of tax deductions.

Claims for “other work-related expenses”, which include mobile phones and internet, climbed to a record $7.9 billion last year — up almost 50 per cent in a decade.

ATO assistant commissioner Adam Kendrick said an increase in workers using technology was a driver of this growth.

“Changes to technology and also to the labour market has led to employees taking on more costs,” he said.

However, only work-related use can be claimed, and records must be kept to separate this from private use.

NDA Law’s Andrea Michaels says there are plenty of potential tech tax deductions.

NDA Law managing director Andrea Michaels said tax-deductible work-related technology expenses could include:

• A portion of mobile phone purchase and usage costs;

• Tablet computers and laptops used for work;

• Accessories such as USB sticks and printers if used for work;

• Part of home internet monthly costs;

• Apps used in the course of doing your work.

“People are on their phones all the time or working from home, so they are legitimately using technology for work,” Ms Michaels said.

TAX: Holiday homes under ATO scrutiny

“But there are some people out there claiming more than they should.

“There are lots of good opportunities for claiming tax deductions for technology, but be reasonable and be able to substantiate it.”

Mr Kendrick said the ATO’s data matching technology and other systems enabled it to compare people’s claims with others in similar jobs and similar incomes.

Phone, computer and internet deductions can potentially boost your tax refund.

“The ATO has more data available than ever and can access it to verify, for example, your telephone use.”

It also speaks with employers. “We had an example of one employer group with thousands of people claiming 100 per cent of their mobile phone bills,” Mr Kendrick said.

“When we went and spoke to the employer we found they weren’t allowed to use their mobile phone for OH & S reasons — with only a few exceptions for supervisors — because of the nature of what they were doing, they couldn’t risk sparks from the mobile phones blowing up the workplace.”

The workers had seen tax agents who were spruiking their ability to get higher deductions, but those deductions were wrong.

“We will allow you to claim up to $50 without keeping records for your mobile phone,” Mr Kendrick said.

“For the other items you need to keep records for a one-month period that’s representative of their use.”

@keanemoney