When June 30 rolls around, do you rush out to complete your tax return, rubbing your hands together with excitement.
Dreaming of new shoes, holidays, a new wardrobe…
Or, do you cringe, moan and drag your feet worrying how much the damage bill is going to be this year?
We’ve compiled a list of tax deductions to try to turn your tax return into cold hard cash.
Generally speaking, you can claim work-related expenses on tax. You must be out of pocket for these expenses, without any reimbursement.
They should relate to the tax year for which you’re claiming, and in most cases, you’ll need some kind of record to prove the money was spent. If you bought or used something for work and home you might be able to claim a percentage of the work-related portion.
Work-related travel expenses are claimable. But this doesn’t include your travel to and from your office – this is considered private travel. However, an interstate flight for work, travel between two different offices, or a trip to visit a customer might be claimable.
If you’re travelling overnight for work and pay for things like meals, taxis and accommodation yourself, think about claiming these as well.
Work clothes and laundering costs
If you wear a compulsory uniform, or require specific clothing or footwear, like chef’s pants, or need protective clothing like sunglasses or non-slip shoes you should be able to claim for these.
You might also be able to claim both your purchasing and dry cleaning/laundering costs.
You will need proof if your annual laundry bill exceeds $150, or if all your work-related expenses for the year total more than $300.
If you make regular cash donations to charity you can most likely claim your donations.
To claim, you’ll need:
- to be giving to a deductible gift recipient
- your donation will need to be money or property
- Receive nothing in return (so if you’re buying a charity pen or lapel pin forget it).
Working from home
If you regularly work at home, things like your computer, phone, electricity, heating and cleaning expenses might be claimable.
But, remember, the expenses must be work-related.
- the cost of cleaning, heating and lighting your home office,
- depreciation of office equipment such as a computer (if the item costs more than $300),
- the cost of office equipment (if it costs less than $300)
- work-related calls and a percentage of your line rental, if you use your phone for work.
Working from home during COVID-19
Due to COVID-19 many people found their working arrangements may have changed. If you have been working from home, you may have expenses you can claim a deduction for at tax time.
Tracking these expenses can be challenging, so the tax office has introduced a temporary shortcut method. It’s a simple way to calculate these expenses with minimal record keeping requirements. The shortcut method initially applied from 1 March to 30 June 2020, however it can now be applied up until 30 June 2021.
- Shortcut method (80 cents per work hour) – available 1 March to 30 June 2020 (this method can also be used during the period from 1 July 2020 to 30 June 2021 but that period will need to be claimed in your 2020–21 tax return)
- were working from home to fulfil your employment duties and not just carrying out minimal tasks such as occasionally checking emails or taking calls
- incurred additional running expenses as a result of working from home.The shortcut method doesn’t require you to have a dedicated work area, such as a private study.
If you use this method, you can’t claim any other expenses for working from home for that period.
If you’re studying something that’s related to your work, and your study will lead to a formal qualification, you might be able to claim the cost of your education.
For example, an Enrolled Nurse studying a Bachelor of Nursing, or an apprentice hairdresser studying hairdressing. You can’t however claim for study that’s not related to your work, so if you’re studying for a career change, forget it.
Tools of the trade
If you need to buy equipment to get the job done, then you might be able to claim it as a deduction.
For example, things like scissors for hairdressers, hard hats for builders, desks, calculators and filing cabinets, basically your tools of trade, may be claimed as tax deductions under $300.
Handbags, briefcases and satchels
You may be able to claim a deduction for a handbag, briefcase or satchel you buy to carry items you are required to use and carry for your work, such as laptops, tablets, work papers or diaries. The amount of the deduction will depend on the how much you use the bag for work purposes.
You can’t claim a deduction if you mainly use the bag for personal purposes, such as carrying your lunch and beauty and hygiene products. This is private use.
Other work-related deductions
Generally, if you need to spend money as part of your income producing activities, you can claim a deduction for the expense.
To claim a deduction for a work-related expense:
- 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 (usually a receipt).
Other expenses that relate to you earning an income can include:
- Books, periodicals and digital information
- Cash shortages or client bad debts
- Claiming mobile phone, internet and home phone expenses
- Election expenses
- Glasses, contact lenses and protective glasses
- Income protection insurance
- Overtime meals
- Protective items, equipment and products
- Seminars, conferences and education workshops
- Union fees, subscriptions to associations and bargaining agents fees
- Working with children checks
The Australian Tax Office has more information on what is and isn’t claimable. They also offer a myDeductions app to help you keep a record of your work-related expenses.
You may also be able to claim a deduction for:
- ATO interest – calculating and reporting
- Cost of managing tax affairs
- Interest charged by the ATO
- Interest, dividend and other investment income deductions
- Personal super contributions
The above information has come from the Australian Tax Office and was correct at the time of publishing. However, it may not apply to your individual circumstances.
Check with your accountant to ensure these deductions apply to you.