A Recap on Claiming Work Related Expenses

With tax time looming, and covid fatigue hopefully in our rear-view mirror, it is a perfect time to update our knowledge on work related deductions.

Housekeeping

First and most importantly, when claiming your work related expenses, you must follow the three golden rules:

1.      You must have spent the money yourself and weren't reimbursed.

2.      The expenses must directly relate to earning your income.

3.      You must have a record to prove it (usually a receipt)

The next important thing to consider is if any of the expense was for private purposes. If so, you will need to apportion the deduction between work and private use and only claim the work related amount.

Specific Deductions You Can Claim

There are four specific categories of work related deductions and one general category for everything else.

The four specific categories are:

1.      Motor vehicle expenses

2.      Work related travel

3.      Clothing and laundry

4.      Self education expenses

Each of these categories has very specific compliance rules and I encourage you to contact us to ensure that your claims do not contain any errors. You can access the ATO fact sheets issued by the ATO by clicking on the links for each category.

The general category covers all other expenses. Once again the three golden rules apply to the general category as does the requirement to apportion expenses between work and private use. Some examples of deductions to claim under this category are:

·        Tools, equipment and other assets under $300 (each item over $300 will need to be depreciated)

·        Union fees

·        Subscriptions

·        stationary

·        telephone and Internet

·        working from home expenses

·        professional memberships such as CPA Australia

·        short course webinars seminars another minor training and professional development expenses

·        Accounting and tax agent fees

·        Donations

·        Additional superannuation contributions

·        Income protection insurance

The list here could possibly be endless subject to your profession and need to purchase items to assist you with earning your income. The ATO has a substantial list of occupation specific deduction guides that you can find here ATO Occupation and Industry Specific Guides.

As always, if you are not sure about what you are allowed to claim, give us a call to ensure that your claims are correct this tax time.