The tax office is warning people to be careful of how they calculate their working from home expenses on their returns. In the last financial year Australians claimed almost $20 billion in deductions for working at home.

For those who have taken time out of the office to work from their lounge rooms, the ATO recommends that the home shortcut method may be the simplest way to claim genuine expenses like use of power, phone and internet etc. However, some people in the past have tried to double dip by also claiming additional amounts for separate usage of working items like mobile phones or decline of computer equipment. The firm message is – it is either one or the other – you cannot claim the all-inclusive shortcut working from home expenses on your return and then also itemise your home office use of printers and office equipment.

Another advantage of the short cut method is to claim working from home expenses is only a diary or timesheets are required, whereas other methods of deductions will require receipts and detailed records.

Likewise, car expenses will also be looked at closely this year. You must choose one method to claim any eligible work deductions. That means either the cents-per-kilometre method or logbook method where you claim the work related portion of expenses separately like petrol, car insurance, and registration. You cannot claim both and double dip. And it goes without saying if your employer has already reimbursed you for an expense, you cannot also claim it on your tax return.

While tax office understands people can make innocent mistakes in their returns, the ATO now uses very sophisticated data analytics to review returns. You risk being penalised for deliberately providing false information.