Claim as many eligible work-related expenses as you can
Many expenses that you incur in order to do your job can be claimed in your tax return. However, many cannot, and incorrectly claiming these may result in a penalty from the ATO. Some are more obvious than others, like an apprentice’s tools or travel expenses. But did you know that journalists may be eligible to claim their pay TV costs? So long as these are incurred while performing their work (for example, a sports journalist that needs to have access to the sport channels), they can be claimed as deductions.
There are thousands of things you may be eligible to claim as work related expenses, so give this some thoughts before you assume you don’t have any deductions to claim.
Here are a few examples that you might be eligible for:
- Tools and work-specific clothing. The item is needed to perform your job e.g. tools that tradesmen use, equipment that hairdressers use, special shoes such as steel cap boots
- Safety items. Item’s needed for self-protection or safety when doing your job e.g. sunscreen and sunglasses if you are required to work outside
- Laptops and mobile phones. If these are used for work purposes you’re able to claim it on tax (if you have a laptop that you use for work and personal use, you’re only entitled to claim the portion that you use for work)
- Courses and conferences. Self-education expenses, such as courses and certificates, need to be directly related to your profession and will help you get a promotion or a pay rise
- Work meals. If you’re away for work and need to buy dinner or another meal, you can claim this as a deduction. But it’s always going to be better financially to try get the full cost reimbursed by your employer instead
Claim tax deductions for working at home
If you work from home full time, part time or only on the odd occasion, you’re eligible to claim this as a tax deduction. Even if it’s just one day a month – don’t think you’re not eligible to make a claim. For example, if you’re doing a job from home (full-time or part-time) that requires you to use computers, phones and other electronic devices, you could be eligible to claim deductions on certain home-running costs. This even includes the cost of your home internet and electricity bills.
Working from home tax deductions may include the following:
- Cleaning costs. The expenses incurred from cleaning office space at home
- Office furniture. Purchase and repair costs for office furniture and fittings required to do your job
- Your phone bill. Landline and mobile phone calls related to work matters (you should get an itemised phone bill and highlight the work-related calls)
- Your home internet bill. You can claim a portion of your monthly internet bill, in line with how often you use it for work purposes
- Electricity bills. You can also claim a portion of your home electricity bills, in line with how often you work from home
You can even claim a portion of your occupancy expenses, like rent, mortgage, and home insurance, so long as you operate your business solely from your home and have a dedicated space for business activities. It’s important you claim working from home expenses correctly, to avoid a penalty from the ATO. You’ll need to show evidence and your calculations to justify how much you’re claiming. A tax agent can do this for you to ensure you’re claiming correctly.
Use a tax agent/accountant
Tax agents charge a fee to help lodge your return. However, for a lot of people, using a tax agent is the easiest way to ensure you’re claiming everything that you’re eligible for and boost your return. You might even find that they’ll help you get a bigger return even though you need to pay a fee (the fee can be quite small, often around $100 for basic returns). Here’s how tax agents can help you this tax time.
- Claim the tax agent fee as a tax deduction. The cost of using a tax agent is completely tax deductible
- Claim more deductions. Tax agents know the ins and outs of the tax system so they’ll be able to help you claim everything you’re entitled to, even things you might not be aware that you’re entitled to claim
- Claim correctly. If you don’t claim your deductions correctly, you could be hit with a fine from the ATO. Tax agents will help make sure you’ve claimed everything correctly so you can have peace of mind after you lodge your return
- Help with calculations. Claiming things like home office expenses and car use can be really tricky and time consuming. You’ll often need to create a log book, or show your working for figuring out how much you can claim. Tax agents are professionals at this, so it can save you a lot of time and stress
- Offer tax tips. Tax agents can also offer you extra tax tips and tips for organising your finances in general
Car and travel expenses
Car and travel costs seem to be an expense most people are comfortable claiming on their tax return. However, taking a guess at the amount of expenses incurred can land you in hot water, as can making an illegitimate claim like travel to and from work. That’s why it’s important to ensure what you’re claiming is considered a travel expense in the eyes of the ATO. Properly claiming these expenses can save you a lot of money come tax time, so it’s worth getting it right.
If you use your vehicle for work, claimable vehicle and travel expenses include:
- Depreciation of your vehicle
- Registration costs of your vehicle
- Insurance costs of your vehicle
- Costs of running your car such as fuel, oil and servicing
You may be able to claim vehicle and/or travel expenses if you fall into the following situations:
- The cost of travelling between two separate work places
- The cost of travelling from your workplace to other locations, e.g. client meetings, project work sites
- If you are required to carry big work-related items such as tools or a ladder and these can’t be left at work
You’re not eligible to claim travel or vehicle expenses for the following situations:
- Travel directly to and from work, as this is generally seen as private travel
- If you don’t live near public transport and need to drive to work
Don’t forget about charity donations
There are just a few things you need to check before claiming a gift or donation. This is one of the most common things people forget to claim, or incorrectly claim as a tax deduction. If you’ve only dropped some spare change in a bucket at a convenience store counter, you’re probably not eligible to claim this as a tax deduction. However, if you are one of the many who make regular contributions to a charity every month, you may be eligible to claim something back at tax time.
- If your contribution meets the below conditions, you’re most likely eligible to claim it as a tax deduction:
- Does the organisation have DGR (Deductible Gift Recipient) status?
- Is the gift truly a gift and not something you receive material benefit or advantage for?
- Do you have proof of these payments in the form of a receipt or bank statements?
- The donation must be in the form of money or a financial asset (i.e. you can’t gift items like clothes and claim the cost as a deduction)
- The gift must be $2 or more
As with all other deductions, it’s best to check anything you want to claim with your tax agent to ensure you’re eligible and avoid a penalty with the ATO.
How can we help?
If you have any questions or would like further information or you are seeking property tax advice, please feel free to contact our office via email –info@investplusaccounting.com.au or phone 02 9299 7000 to either speak with someone or arrange a time for a meeting so we can discuss your requirements in more detail. You can arrange a free 15 minute no obligation chat to discuss your options. Please arrange an appointment with our office by clicking here
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