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Although most real estate employees are aware of their tax obligations, many of them are unsure of what they are permitted to claim with regards to work-related expenses. Below is some handy information regarding what counts as a work-related claim and what type of evidence will be required to support any work-related expense claims you want to make.

In order to claim a deduction as a work-related expense, it is essential that you have spent the money yourself. In other words, you cannot have been reimbursed for it at any time. The expense you want to claim must also be directly related to earning your wages or salary and you must have a clear and concise record to prove that the expense(s) in question are in fact worthy of being claimed as work-related deductions.

In cases where you would like to claim a deduction for expenses that have been incurred for something that has been used partially for personal and partially for work purposes (for instance mobile phone expenses), you will only be allowed to claim the portion of the expense that directly relates to the business use portion.

Evidence or Proof Required to Support Claims

If the total amount of your claims add up to over $300 (this excludes claims for meal allowances, vehicle, travel allowance and award transport payment allowance), you will be required to keep written evidence of these claims, such as purchase receipts. These written receipts and/or other written evidence will need to show that you have incurred the whole amount of your claim and not only the amount that exceeds the first $300.

In cases where the amount that you are claiming for expenses is $300 or under, you will not be required to keep any receipts. However, you will need to be able to show exactly how you have calculated your claims.

Keeping Records of Expenses and Claims

You will be required to keep all written evidence of your work-related claims and expenses for five years from the due date of submitting your tax return. In cases where you have submitted your return after the due date, the five year period will then start from the later date. If you are including depreciating assets in your tax return, you will need to keep records for an additional five years from the date of your last claim for any decline in value.

When storing your evidence of receipts and expenses, it can be done in paper or electronic format. It is strongly recommended that all paper receipts be photocopied, as these usually fade over time. If you prefer storing your documents electronically, such as on an external hard drive or in the cloud, you should store two copies in different locations. This ensures that you have a backup in the event of information loss or data corruption at one of your storage sources.

It is important to remember that when you complete the declaration section of your tax return, it is an indication that the information you have provided is true and accurate, and it denotes that you are able to support your claim with written or electronic evidence. Regardless of whether you use a registered tax agent to compile your return or you do it yourself, you will also be responsible for providing the required proof of your expenses.