With the EOFY deadline finally here, getting prepared for your tax return should be your top priority if you want the best return possible. This means it’s time to stop and note all of those work-related expenses you’ve incurred during the financial year.
Most of us know that work-related expenses are deductible to reduce your taxable income when you lodge your return. These expenses are considered claimable by the Australian Taxation Office (ATO) if:
- Your expenses directly relate to earning your income, eg. vehicle and travel, dry-cleaning and uniforms, and tools and equipment.
- You have a legitimate record of any work-related expenses, such as receipts, bank statements, bills, or diary entries.
- Your expenses had both personal and work use, you can claim the work portion of that expense.
- You spent money for work-related reasons and you weren’t reimbursed by your employer.
According to the ATO, all employees (including casuals) can claim work-related expenses in the financial year that those expenses incurred. If you started employment in June but didn’t receive income until the next financial year, you can still claim deductions for any work-related expenses that incurred in June.
Common and uncommon tax deductions
So, now we’ve established what and when you can claim, we’ve broken down the deductions into a list of common and uncommon deductions you may or may not know that you can claim at tax time.
- Work-related vehicle and travel expenses
- Clothing, laundry and dry-cleaning expenses
- Home office expenses
- Tools, equipment and other assets
- Some other work-related deductions.
- Gifts and donations
- Union fees
- Rental property expenses
- Income protection insurance
- Medical expenses
- Work-related technology expenses: ie. mobile phone, laptop or home-internet use
- Financial loss and bad debt
- Self-education expenses
- Tax affair management costs.
To further explain how these deductions work, we’ve put together a couple of scenarios.
If you’re a tradesperson
It’s easy to get confused with what’s claimable and what’s not when you work in a trade due to the number of transactions that are involved. To make it easier, we’ve put together a list of some things you may be able to claim if you’re a tradie on the tools.
- Tools, equipment, repairs and other assets: Using your own tools for work? You can claim a portion of your tools and repair of any tools in your upcoming tax return.
- Occupation-specific clothing: If you’re using protective wear while you work, this can be claimed as a deduction. Think steel-capped boots, hard hats and sunglasses.
- Vehicle and travel expenses: If you own a car related to work, or you travel to work using your own car and you don’t have a car allowance – you can claim a portion in your tax return. Remember, you can also claim any travel expenses relating to work if you travel far distances, and this may include meals!
- Training courses, licenses and certifications: If you’re studying in your industry, such as TAFE, University, or any courses that relate to your job, your tuition fees are 100 per cent tax deductible.
- Union and association fees: Are you subscribed to trade, business or professional associations? This is claimable in your tax return. Just provide your statement of fees and subscriptions paid.
Remember, you can claim the cost of managing your tax, too. This includes tax agent fees if you’re an individual or a business, any accounting software you use for payroll, and any appeals in court that relate to tax affairs.
If you’re studying
If you meet the criteria by studying to improve your current career, or you’re part of a traineeship and you can provide evidence that your self-education can lead to an increase of income, you may be eligible to claim deductions including:
- Course or tuition fees not related to the HECS/HELP debt: If your self-education courses have sufficient connection to your work, this is claimable.
- Student service fees: Just provide evidence of your receipts to your tax agent or the ATO.
- Union fees: Are you signed to any subscriptions that relate to your work and better your education? These subscription fees are deductible on your next return.
- Equipment depreciation: Using a computer, laptop or printer for work that’s depreciating from use? Don’t forget to lodge these expenses on your return to claim a portion.
- Stationery and textbooks: You can claim a portion of tools that are directly related to your self-education. And yes, we’re talking about your favourite fluffy pen.
So what can you potentially claim?
Want to know what you’re eligible for in your upcoming tax return? The team at BTMH focus on delivering individualised tax return solutions to ensure the best possible outcome for you.
We review all investments, assets and work-related expenses when tailoring your lodgement to get you the highest return possible.
If you’d like to know exactly what you can claim, contact us. We’d love to hear from you.