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​ATO cracks down on tax claims for electronics

As the end of the financial year looms, the ATO has warned that Australians who claim computers, smartphones and electronics as work expenses will face close scrutiny when they file their tax returns.

Plantronics Germany, CC BY-ND 2.0

The Australian Taxation Office will be keeping a close eye on the tech in your tax return this year, focusing on Australians that claim computers and electronics as work expenses.

It's a departure from tradition for the government body. While the ATO has previously focused on particular industries that might be fudging their deductions, the Office will this year be cracking down on the actual expenses that individuals are claiming against their taxable income.

"People are using their computers at home for work-related purposes but it is very important they understand the distinction between what is work-related and what is personal use," ATO assistant commissioner Karen Antsis told news.com.au. "We have guides on our website for specific industries and occupations.

"The number one piece of advice I have for taxpayers is to claim the right amount -- no more, no less -- and have evidence to substantiate their claim."

The ATO will also reportedly be using more advanced technology to check the validity of claims this year, enabling the office to "look at every single tax return".

What can you claim?

The ATO has regulations that govern what individuals can claim as deductions, and the value they can claim. Deductions for Tools and Equipment such as computers are allowable -- devices valued under AU$300 can have their full cost claimed, but if the device costs over AU$300, users can "claim a deduction for their decline in value". However, the electronics must be used for work.

"When completing your tax return, you're entitled to claim deductions for some expenses that are directly related to earning your income," the ATO website states. "The expense must not be a private, domestic or capital expense. If the expense was both work-related and private or domestic, you can only claim a deduction for the work-related portion."

The sticking point for many who use a laptop or smartphone for work is that they often also use the same device for personal use; in this case, the ATO requires written records of use in the form of a diary.

If you just bought a shiny new laptop, for example, but it won't spend all its time at your desk or in your home office, you need to keep a written diary to show "how much you used your equipment, home office and phone for business purposes over a representative four-week period".