Tax Deductions in General
You are entitled to claim tax deductions for work related expenses provided that:
– You incurred the expense in earning your income
– The expense is not private (personal) or capital in nature
– You have supporting evidence such as receipts
If the expense is for both work and private purposes, you should claim just the work-related portion.
Like most things when it comes to tax, it is rarely as simple as this. For example, you would think using these principles that you should be able to claim 99% of the cost a business suit that you use 99% for work. Unfortunately not.
The good news is that there are some specific deductions to be aware of, particularly if you work in certain industries.
You can generally claim an immediate deduction if the cost does not exceed $300 and it relates to you earning your income. Examples include:
– Business subscriptions
– Business trips
– Work related clothing
– Education expenses including books and journals related to your existing income, not a new job in the future
– Some home office expenses
– Internet expenditure
– Printing & stationery
– Software and computer tools
– Telephone expenses
– Tax agent fees
– The cost of insuring and repairing various items used for work purposes such as calculators, computers, mobile telephones and tablets.
– Sunscreen lotion, sunglasses and hats for outdoor workers, after apportioning their private use
– Tools and equipment
– Certain laundry costs (special rules apply)
With expenses of more than $300, such as laptops that relate to your work, you may be able to claim part of their cost each year over their useful life (decline in value; often referred to as depreciation).
Beware though, if you have been reimbursed by your employer for any work related cost, say for example a business trip, you can’t “double up” and claim a deduction in your personal name as well.
What Evidence do I Need?
For most deductions, you need to have receipts or other written evidence to support your claim which you will need to produce to the Tax Office if they ask for it.
Where your general work related expenses in total are less than $300, you don’t need receipts but you may still have to justify that the claim is reasonable if you are asked.
This exemption does not apply to deductions related to allowances you might have received such as for meals, transport and travel and also for car expenses.
Whilst business suits are generally not deductible, you can deduct the cost of clothing used for work that is:
– Protective in nature, protects you from injury or your everyday clothing from damage
– Occupation specific and not conventional in nature
– A compulsory uniform that is distinctively a uniform that identifies the employer or products/services
– A non-compulsory uniform that meets certain criteria
Here’s a few specific examples that have been allowed.
– Footballers: The cost of clothing used primarily in a footballer’s professional sporting activity, for example jumpers, T-shirts, shorts and shoes, is deductible.
– Professional actor: Who buys clothing to wear on stage as a costume in a particular production
– TV game show hostess: Who buys evening wear and formal wear to complement the set and prize showcases
And here are a few examples that have not been allowed.
– A parliamentarian: Who decides as a result of the televising of parliamentary proceedings to buy a range of high quality garments to wear on those occasions
– A sales assistant: In an exclusive menswear store who is required to wear clothing from the labels available in the store.
– Barrister’s dark clothing: A female barrister was denied a deduction for the cost of conventional dark clothes which she was required to wear to work.
– Black suit for a wedding photographer: The cost of a black suit worn by a wedding photographer was not deductible.
– Dinner suit: The cost of a dinner suit was not deductible to a senior public servant who was expected to attend a number of formal functions in an official capacity.
Grooming is an often misunderstood area. As a general rule, the Tax Office will not allow a deduction for personal grooming expenses, even if you are required to be well groomed for your job.
For example, hairdressing and make-up costs are generally not deductible, even for occupations that require you to maintain a high standard of appearance such as the cost of make-up for a flight attendant.
Yet flight attendants are generally allowed to claim expenses that are occasioned by their occupation such as skin moisturisers and hair conditioners due to the dehydration caused by cabin pressure.
The Tax Office will usually accept as deductible the cost of make-up and hairdressing required for a particular performance of performing artists. For instance a performing artist may require a particular hairstyle for a role or as part of a costume. The cost of make-up bought for stage, film, television performances or a ballet dancer’s performance may also be deductible.
As you can see, what is allowable as a deduction and what is not is not always obvious. It always best to consult with a tax agent for advice that considers your personal circumstances.
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