Work-Related Tax Reductions are any extra costs in which you paid out of pocket for, relating to your work needs.
For all work-related tax deductions you must:
1. Spent the money yourself and weren’t reimbursed by either the company that you work for by a manager/supervisor
2. It must directly relate to earning your income. This means that by making these purchases, it has a direct impact on your ability to complete your work
3. An absolute must is that you have a receipt or a record to prove the transaction. The receipt must have the date on it, the cost, quantity and GST number on it.
There are several examples of what you can claim for work-related tax deductions:
1. Vehicle and Travel Expenses: This includes travelling between work and home. It includes car expenses, removal or relocation expenses, accommodation allowances, award transport expenses (coaches) and expenses when travelling away from work.
2. Clothing, Laundry and Dry-Cleaning Expenses: This includes all purchases for occupation-specific clothing, any personal protective clothing, work uniforms and cleaning of work clothing. For cleaning of work clothing, you can claim for power bills, dry-cleaning and purchase of specific cleaning materials.
3. Home Office Expenses: If you’re an employee who regularly works from home, you may be able to claim a deduction relating to supplies that you have purchased for your work. You can claim running expenses which are anything to run your business. This includes heating, cooling, lighting, cleaning costs, repairs on home office furniture and home office equipment. For home office equipment you can claim the full purchase price up to $300 if it is above $300 then the deduction decreases in value.
4. Self-Education Expenses: These include anything relating to expenses regarding self-educated relating to your current work activities as an employee or if you receive a taxable bonded scholarship.
• accommodation and meals (if away from home overnight)
• car expenses
• computer consumables
• course fees
• a decline in value for depreciating assets (cost exceeds $300)
• purchase of equipment or technical instruments (costing $300 or less)
• equipment repairs
• home office running costs
• internet usage (excluding connection fees)
• parking fees (only for work-related claims)
• phone calls
• student union fees
• student services and amenities fees
• trade, professional, or academic journals
• travel to-and-from place
5. Tools, equipment and other Assets: This includes any equipment or assets that you have purchased in order to complete your work. If you use the equipment for 50% for work and 50% for private use, then you can only deduct 50% of the Cost. Examples of equipment and assets are:
• computers and software
• desks, chairs and lamps
• filing cabinets and bookshelves
• hand tools or power tools
• protective items, such as hard hats, safety glasses, sunglasses, sunscreens and cosmetics containing sun protection
• professional libraries
• safety equipment
• technical instruments.
6. Other work-related deductions: Generally, if you need to spend money to earn an income, you can more than likely claim a deduction for that expense. Examples for other work-related expenses are:
• 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
• Project pool deductions
• Seminars, conferences and education workshops
• Union fees, subscriptions to associations and bargaining agents’ fees
• Working with children checks
How to claim these deductions in your tax returns are:
If the expense was for both work and private purposes, you can only claim a deduction for the work-related portion. Work expenses reimbursed to you by your employer are not deductible.
We can seek information from your employer if we think you have claimed a deduction for an expense that you have already been reimbursed for.
You may be able to claim a deduction for expenses that directly relate to your work, including:
• Vehicle and travel expenses – including travel between work and home
• Clothing, laundry and dry-cleaning expenses
• Home office expenses
• Self-education expenses
• Tools, equipment and other assets
• Other work-related deductions
Employees (including casuals) can claim work-related expenses in the financial year they are incurred. This is the case even if you start employment in June but don’t receive income until the next financial year, you can claim deductions for work-related expenses incurred in June.
If you employ someone to assist you in your employment, you can’t claim a deduction for employing that person.
If you still need help or have any questions regarding your individual tax return, then please leave a comment below or call 1300 751 700. Our personal tax accountants in Perth are more than happy to advise.