Taxpayers generally cannot count their home as a workplace unless they carry out itinerant work - that is if they have shifting places of work.

In a case this month, the Administrative Appeals Tribunal denied a Queensland farm worker Glen Walker almost $30,000 in expenses for meals, groceries and accommodation over two financial years.

The taxpayer had claimed he was an itinerant farm worker - that travel is an inherent part of his work, and consequently he was entitled to deductions for his travel, accommodation, meals, groceries and mobile phone and internet services, while on circuit.

Following an audit of the Queensland farmer's tax affairs the ATO disallowed the deductions, issued amended assessments, and imposed penalties for failing to take reasonable care. The AAT upheld the ATO's decision.

Tribunal deputy president Ian Molloy said: "Mr Walker's circumstances are clearly distinguishable from that of employees who in the course of their employment are compelled, by their employer, and not by choice, to spend money on accommodation and other expenses. It was Mr Walker's choice to live and work where he did."

Mr Molloy said he was "not satisfied that the telephone and internet expenses are outgoings that can be claimed as deductions".

An ATO spokesman said as the tribunal decision may be subject to appeal, the ATO will not comment on the decision.

But speaking generally about work-related deductions, the spokesman said: "Individuals are entitled to claim deductions for expenses related to their work - no more and no less."

Work-related deductions under watch

Tax Commissioner Chris Jordan has said that the ATO is focused on wage and salary earners claiming work-related expenses.

More than 80 per cent of Australia's 12.8 million taxpayers claim deductions when they lodge their tax returns.

In 2012-13, total deductions of $31.3 billion were claimed by personal taxpayers against $704 billion in taxable income, with an average amount claimed of $3025.

The biggest deductions - totalling $19.7 billion - were for work-related expenses. Nine million people claimed an average of $1545 in work-related deductions such as car expenses, office costs, work-related travel and self-education expenses.

The ATO says there are three golden rules for claiming all work-related expenses: "You must have spent the money yourself and weren't reimbursed, it must be directly related to earning your income, you must have a record to prove it," the spokesman said.

"Where expenses are for both private and work-related purposes, individuals should take care to appropriately apportion their claim," he said.

The ATO spokesman said the agency was looking closely at personal deduction claims that seem private in nature, or where the overall claim is higher when compared to others earning similar income, in similar jobs.

"While a larger than expected claim may be legitimate, it will cause us to ask further questions," the spokesman said.

Internet and mobile phones and self-education and meal allowance claims have also been under watch.

"Individuals need to ensure that large claims are substantiated with evidence of the actual expenditure," the spokesman said.

Individuals also need to be aware of the rules for overtime meal allowance claims, he said, while those making claims for self-education expenses should ensure that there is a direct connection between the expenses and the performance of employment duties.

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