finance

Take care. The ATO is cracking down on your favourite tax deductions this year.

Do your homework then check it. Twice. That might sound like the sort of advice you’d give your kid at Christmas, but it’s also prudent for tax time, because the ATO will be cracking down on some pretty common deductions this year.

They’ll be keeping a particularly watchful eye on work-related expenses, such as mobile phone bills, internet and travel, as well as rental property entitlements.

Last financial year alone, the ATO raked in $950 million in liabilities following audits on these types of claims, reports The Age, and the figure is expected to be the same in 2015/16.

A guide to claiming work-related expenses. Post continues after video.

Surprised? Don’t be. Each year the ATO is forced to get in touch with more than 350,000 people who’ve done the dodgy on their tax returns, either on purpose or by simple omission.

“We’re trying to help people get it right,” ATO Assistant Commissioner Graham Whyte told The Age. “We want people to claim what they are entitled to – no more no less.”

For work-related expenses, which roughly 8.5 million of us claim each year, there’s a relatively simple test you can apply to determine what’s deductible: “You have to have spent the money yourself, it must be related to your job, you must have a record to prove it,” said Assistant Commissioner Adam Kendrick.

Rental incomes will also be closely watched this year, including money earned from renting out rooms or homes via share-economy platforms like Airbnb.