24 May Tax Time: What expenses can I claim?
The tax return process can be complicated, leaving you wondering what exactly you can claim on tax. We’ve summarised below some of the more frequent questions we get on what you can and cannot claim.
Remember, in order to claim an expense:
- You must have spent the money and not been reimbursed by your employer.
- The expense must relate to your job.
- You must normally have an invoice or receipt to prove what you’ve spent.
As a general rule if you need to buy something to perform your job then it will be a tax deduction. Where it gets tricky is if you use that thing for both work and personal. Like a mobile phone. If your phone is used for both work and personal means, this doesn’t mean we can’t claim the cost of your phone and your monthly phone bill, it just means we need to apportion what we claim.
To be able to claim your phone or home office expenses etc, you need to keep a 4 week diary detailing how much time you spend in your home office for work and how much just surfing the web for fun. That’s how we work out the work vs. private portion.
So, what can you claim?
- Sunscreen and sunglasses if you work outside & your employer doesn’t already provide this for you.
- Hard Hats + safety glasses (and any other protective wear) that you have had to purchase yourself & haven’t been reimbursed by your employer for
- Education courses for work (remember these need to have a direct impact on your work)
- Tools and equipment
- Telephone costs – remember these will need to be apportioned between private + work
- Internet costs – private vs. work will need to be calculated
- Computers + iDevices you purchase for work – again private vs. work needs to be calculated
- Stationery you use for work
- Software you purchase for work
- Other tech gadgets you need to use for work
- Home office costs if you work at home – you need to keep a 4 week diary detailing the hours spent working at home.
- Home office costs – desk, chair, lamp, filing cabinet, bookshelves etc if these are required for your job
- Union or trade fees
- Premiums on income protection insurance
- Magazines that have a direct relation to your job. I.e. a truck driver subscribing to Australian Truckie Magazine
- Buying, ironing & washing clothes that you must wear for work – i.e. protective clothes or a uniform
- Travel Costs such as Airplane, Train, Accommodation for a conference or work trip
- Parking if you need to visit customers etc
- First aid course if you are the first aid person at your work
- Your accountant fees
- Charitable donations
The other tricky part is any tools, equipment, tech stuff that costs more than $300. Whilst you can still claim them as a tax deduction you don’t get to claim 100% in the year you purchase it. We have to claim the expense over the life of the asset.
So, what can’t you claim?
Really, it’s the things you DON’T need for work:
- Trauma or life insurance
- Entertainment expenses
- Fines and penalties
- Child care
- Social club fees
- Expenses your employer has already reimbursed you for
- Drivers licence
- Commuting to and from work
If you’re still unsure, you can watch a video from the ATO, on getting your deductions right.
What about things that are specific to my occupation only?
The ATO actually have some great guides on tax deductions for specific industries and occupations.
It’s worth taking a minute to ensure you are not trying to claim things you can’t or missing out on any deductions Of course, if you have any questions, you can always contact us to answer them for you.