What Job-Related Expenses Are Tax Deductible?

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When it’s time to lodge the tax return one starts to think of the expenses incurred over the financial year. Some of the expenses may fall under the category of work-related expenses. Some of which may be claimable as a tax deduction. To present tax deduction expenses you must know all the nitty-gritty involved. Here’s a brief guide to help you understand tax-deductible expenses better.

Rules for claiming job-related expenses

To claim a deduction under job-related expense, you must take into account the following:

  • Keep clear data of the money spent and not reimbursed.
  • The expense must be directly related to income.
  • A record must be kept to prove the money expenditure.

Also, keep in mind that you can only claim the expense which is incurred in the relevant income year. For instance, if claim deduction is filed for 2019 income tax return, the expenses must be incurred somewhere between 1st July 2018 to 30th June 2019.

Take the Deductibility Test                                                

You can claim deductions for an expense if it falls under the following parameters:

  • The expense is incurred in performing employment activities, for instance, travel, home office, and phone expenses.
  • Work tools & equipment expense, self-learning, and eligible clothing expense.
  • The money must not have already been reimbursed by the employer.
  • You have a record of the expenses such as bank statement or diary entry, as well as receipt.

List of job-related expenses that are tax-deductible

  • Travel Expenses – The Australian Tax Office lays out very specific conditions related to what trips qualify as job-related expense trips. 
  • Laundry – If your job demands occupation-specific clothing, work uniforms, and protective clothing, you can claim the money spent. In case, your employer provides you allowance for cleaning and clothing, then you must present it as a part of the income on your tax return. 
  • Gifts and donations – Check if your favorite charity has the ATO’s deductible gift recipient status. If it does, then you can claim for the gifts donated. Any amount gifted above $2 can be claimed. 
  • Home Office Expenses – Tool and equipment, for instance, furniture, computers, and phone which are considered essential for work purposes may be claimed. The cost that you incur when you run home office may also be well included like cleaning, repairs, as well as heating. 
  • Investment Income – The interest received on savings, dividends from investment in shares, rental payment, are some of the major investment income types essential. You can claim the cost related to producing this income, for instance, the account-keeping fees, interest charges incurred on money borrowed to purchase rental properties and stocks.
  • Education –If you opt for an education course that helps you study and perform better at work then you can claim that expense. 
  • Miscellaneous Deductions – Books, digital information, cost of tax affairs management, union fees, and subscription, personal super contributions, income insurance protection, the interest charged by the Australian Tax Office.

Things you should know

  • The Australian financial year ends on the 30th of June. You can lodge your tax return from 1st July to 31st October for the previous income year. If you utilize registered tax agents to lodge your tax return that also adds to the benefit.
  • Tax laws are subject to change. You must double-check on the Australian Tax Office Website to be sure of the changes.

You must seek financial advice and help from the independent taxation service provider. The Perth Tax People are focused on helping you with your tax accounting needs. Our due diligent team provides tax planning to business owners. Hence, we are a one-stop-shop for all accounting and taxation needs.

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