Work Related Deductions
When the Australian Tax Office (ATO) looks at work related expenses, they generally check that the cost has actually been incurred, whether it was actually required and whether it relates to earning your income as an employee. Even if you receive an allowance from your employer, for example in the building and construction industry, this does not necessarily entitle you to claim a deduction for the full allowance but generally only for the expenses actually paid.
To claim deductions the expenditure must be related to your employment. While you may not need to show receipts for work related expenses up to $300, you should keep all of your receipts as you may need these to prove your expenditure and to maximise your allowable deductions. The ATO will accept credit card, Bpay or email receipts as long as they provide full details of the supplier, type of goods, date of purchase and the amount. You should keep your receipts for five years from the date you lodged your tax return in the year the claims were made.
Deductions That Can Be Claimed
- Fees for the preparation and lodgement of your tax return, as well as travel, with a registered tax agent.
- Replacement, repair and insurance for trade equipment used for earning your income.
- Purchase of books or journals needed to undertake your work efficiently.
- Sun protection including sunglasses, sunscreen and hats and for outdoor work, but only for the work use component.
- If you have to use your own car and are on the road a lot for work, you can claim a tax deduction for your car. However, home to work travel and work to home travel is generally treated as a private expense and non deductible.You should keep a log book for a minimum of 12 consecutive weeks, which will genereally be valid for 5 years. You should also keep all of your receipts for the car such as servicing, repairs, insurance and petrol costs.
- Travel expenses if related to your job function as well as for meals if you stayed overnight. A travel diary should be kept if you were away from your ordinary place of residence for six or more consecutive nights.
- If you are paid a travel allowance, you can only claim a deduction if you incurred the expense, it is work related and you can show the relevant documentation.
- If you have a home office where you undertake your income producing work, you can claim deductions on a percentage of your home expenses such as heating and coolling costs, lighting expenses and depreciation. The deduction only applies to costs that are additional to those that would otherwise have been incurred. A diary should be maintained over a four week period showing the taxpayers pattern of use of the home office. Additional costs such as rent, insurance, rates and interest can generally only be deducted if the home is a place of business, for example, a doctor with a waiting room at home.
- You can claim any additional expenses that you incurred for attending a work-related conference while on your overseas holiday such as registration fees and fares to and from the conference.
- If you are required to make work-related calls from home then you can claim a portion of the rental costs, as well as call costs for land line and mobile phones. You must keep a log book of calls.
- Purchase of equipment such as laptops and mobile phones for use in your job. If the equipment is used both for work and private purposes, the expense must be apportioned as only the work related portion is deductible. If an item is $300 or less the full cost can be claimed in one year, otherwise the cost will be depreciated over the useful life of the item. For each item, you should keep a log book for at least 4 weeks of job related use to help work out the proportion you can claim.
Expenses you incur for work related protective clothing, uniforms, occupation specific clothing and laundering and drying-cleaning of aforementioned clothing.