Surprising Things You Can Claim At Tax Time
Did you know that you can claim some surprising things on your tax return in Australia? For example, if you’ve made home improvements or incurred medical expenses, you may be able to get a tax refund.
So it’s worth taking some time to familiarise yourself with the list of possible deductions and make sure you claim everything you’re entitled to. Keep in mind that eligibility for certain deductions may vary depending on your individual circumstances, so always check with the Australian Tax Office before submitting your return.
Did you know that there are a number of surprising things that you can claim at tax time in Australia? This includes things like your work-related car expenses, the cost of maintaining tools and equipment for your job, and even the cost of union or professional fees. So if you’re looking to get some extra money back from the tax man this year, make sure to check out the full list of what’s eligible for a deduction!
One of the great things about tax time is that so many deductions and credits are available to taxpayers. This can help reduce the amount of tax you owe or even get a refund. However, there are some deductions and credits that may surprise you. Here are four surprising things you can claim at tax time in Australia.
Surprising Deductions You Can Claim
As tax time creeps up, you want to start racking up those receipts to ensure you can claim those deductions.
The general rule is that if you incur an expense as part of your job and aren’t reimbursed by your employer, you can make a claim.
While most people would know the classic claims, be careful of standard deductions if you don’t have anything to support them, warned Greg Travers, head of tax, William Buck, such as the $300 of work-related expenses, $200 of small items and $150 of laundry costs.
“If you claim these, be ready to answer questions from the ATO on how your actually spent the money,” he said.
The Australian Taxation Office has flagged it’s on the lookout for anyone trying to claim hefty working-from-home expenses while also maintaining or increasing claims for things like car, travel or clothing expenses.
Yet even among these standard claims, there are little-known rules that people could use to their advantage.
Most people know that they are entitled to tax deductions for charitable donations, but it’s not common knowledge that you may have an option of spreading the donation deduction over five years via an election, revealed Davide Costanzo, chairman of the Moore Australia Tax Committee.
According to Mark Chapman, director of tax communications at H&R Block, there are many things you should be claiming for five of the most popular Australian professions.
Here’s how to get the best bang for your bank in your tax return.
Healthcare And Social Care
If you’re required to wear a uniform as part of your role, the cost is deductible, said Mr Chapman, but it doesn’t end there.
“You can also claim a deduction for the cost of clothing that you use at work to protect your ordinary clothes from soiling or damage, for example, laboratory coats and aprons,” he said.
“You can also claim the cost of COVID-19 protective equipment, such as hand sanitiser, antibacterial wash or face masks.”
Protective clothing, such as non-slip shoes, are also deductible.
If you were lucky to attend a conference during the pandemic, there are many ways to cash in.
“As well as the cost of the conference itself, that can also include travel, meals and accommodation costs – even where the conference is overseas, though you might need to apportion the costs and disallow the private bit if you spent some downtime on the beach afterwards,” Mr Chapman said.
Whether it’s for a body like the Australian Medical Association or to a trade union, professional subscriptions can be claimed.
If you’ve put in long hours and worked overtime, the good news is you can claim for the cost of buying meals provided your employer hasn’t paid you an allowance.
The cost is also claimable for those who get their work through an agency.
“Many healthcare workers will need to use their own car as part of their job. That can include transporting patients, travelling between patient’s homes or travel from one medical facility to another; all such journeys are potentially claimable,” he added.
Wearing a uniform can be a murky one depending on the type of store you’re working in.
“If you wear conventional clothing, the cost isn’t deductible,” Mr Chapman said. “Some retail workers in fashion stores are required to wear clothing from the particular store or brand they are employed by; but those garments are still classed as conventional clothing, so no deduction is available.”
Work-related courses are counted as deductions and could include health and safety or first aid courses, management training or job-related courses such as a Certificate III in retail.
If you travel between stores, you can claim the cost of travel from one work location to another.
“That could include any time you spend temporarily working from a different store to your regular workplace – perhaps providing holiday cover – as well as trips between stores delivering stock,” he said.
Professional And Admin Workers
It’s not just a fashion statement, but a handbag or briefcase is claimable if you need it for work purposes, such as carrying paperwork or a laptop.
“Be careful though; the ATO may query whether a Gucci handbag is really required as part of your job,” Mr Chapman warned.
Don’t think your suits and other business wear is a deduction in general, though; it’s much more specific for professionals.
“Clothing specific to the legal profession, such as the robes and wigs worn in court by barristers, are deductible,” he added, who can also claim their annual practising certificates and professional indemnity insurance.
If you travel as part of your work, you can claim the costs of your work-related journeys, such as the cost of visiting clients or suppliers.
“If you use your own car, either claim 72 cents per kilometre up to a maximum of 5000km or keep a logbook and claim your actual expenses,” he advised. “You can also claim for parking, tolls and public transport if you don’t use your car.”
Unfortunately, the cost of entertaining clients isn’t tax-deductible.
“Sadly, you can’t claim the cost of club fees, such as the local golf or tennis club, even if you use your membership as a means of networking and meeting clients,” he noted.
Education And Training Workers
Annual teacher registration fees are a win for deductions, along with the costs of reference books or a professional library for the subject you teach.
“Prizes that you purchase to reward the achievements of your students and encourage future performance are claimable,” Mr Chapman added.
“Stationery, art materials, stopwatches and computer consumables including pens and toner cartridges are all deductible.”
Don’t forget that depreciation on technology costing more than $300, like computers, laptops, tablets, mobile phones, and printers, is deductible, as well as for items less than $300 which may be written off immediately.
Conferences and courses linked to your teaching can be claimed, including associated costs such as travel and textbooks, while your prep work is also a good thing to include.
“If you mark homework or prepare lessons whilst at home, you can claim home office expenses such as a proportion of internet costs and the associated costs of any technology you use such as computers and printers as well as a portion of utility bills,” he said.
“If you pay for school excursions, such as sporting or camping trips, out of your own pocket and aren’t reimbursed, the costs are claimable. This can include meals, transport and accommodation costs.”
Construction And Manufacturing Workers
The cost of any tools or other work-related equipment that you’re required to buy for your job are entitled to an immediate deduction for any tools costing up to $300.
“Anything more expensive than that needs to be depreciated over the life of the tool,” Mr Chapman said.
You can also claim a tax deduction for the cost of insuring tools and interest charged on finance taken out to buy tools and equipment, he added.
The good news for construction and manufacturing workers is that you can deduct expenses for buying and maintaining your uniform if you’re required to wear one. It has the businesses logo on it.
“Ordinary items of clothing like a plain khaki shirt that you could wear at another job or outside work would not qualify,” he noted.
“A khaki shirt emblazoned with your employer’s name would qualify. The cost or protective items such as helmets, ear muffs, safety goggles, sunglasses, sun hats and sunscreen can also be claimed.”
If you’re a member of the trade union, those fees can be claimed, while the cost of renewing any professional licences, registrations or subscriptions are claimable
“The cost of self-education courses run by a university or TAFE, such as an apprenticeship course at a technical college, provided the course relates to your current job are deductible,” he said.
You can also claim for overtime meal expenses up to the amount actually spent where you are entitled to an allowance under an industrial law, award or agreement.
Surprising Things You Can Claim As Tax Deductions
Whether you’re a tax-time veteran or approaching the EOFY as a newly-minted employee, you’ll want to get as much out of your tax return as possible. Knowing all the work-related expenses, you can claim tax deductions on will help you in that mission.
To help untangle the tax web, we spoke to Shayne Sommer, a certified financial planner and private client adviser at Shadforth Financial Group, for some general advice around deductions at tax time.
Here are claimable expenses you might not have considered.
Things That’ll Help Boost Your Career
If you’ve purchased a book or subscription to research something for work, you can whack it on the claimable list. Similarly, if you want to become part of a union or professional association which supports your occupation, those costs are also claimable.
Then there’s the option to claim things like self-education, seminars and other training courses. While this is a great way to up-skill for work, Sommer explains it doesn’t give you a licence to take up personal interest courses and expect a tax deduction.
“The rule of thumb comes back to the course being related to your current occupation and whether it is likely to help you increase your income in that occupation,” she says.
“If you’re employed as a painter, and you undertake a course to become a yoga instructor, that yoga course won’t be deductible until you are earning money in a vocation related to yoga.”
Income Protection Insurance
If you’ve paid for income protection insurance – a policy with a private insurer outside of a super fund – be sure to include it in your tax return.
“Income protection premiums that have been paid personally can be claimed in any financial year they have been paid or incurred. So it doesn’t matter if you have been working or not, you can claim the sum of the premiums paid as a tax deduction,” says Sommer.
But remember, if you’re unable to work due to illness or injury and do make a claim through your income protection policy at any point in the financial year, that benefit amount is counted as taxable income. So make sure it’s included as such in your return.
“Wherever the payments are coming from, it’s always worth asking them whether they’re taking tax out for you or not,” says Sommer. “If you’re on a claim through a policy, be aware that those benefits are not tax-free.”
Car-Related Costs When Travelling For Work
While you can’t write off your commute to and from your workplace, there are a few ways to recoup some of the dosh you’ve spent on your wheels if you use them for work in any other capacity.
Suppose part of your job involves driving to various locations during the workday, perhaps as a sales person or for client meetings. In that case, you should consider how far you drive in a year and decide to use either the logbook or the cents-per-kilometre method to calculate your claim.
“The logbook method is generally more appropriate when you are travelling more than 5,000km per year for your job, as the cents-per-kilometre method caps out at claiming 5,000km of travel,” says Sommer.
“You can also claim depreciation using the logbook method, which you can’t do via the cents-per-kilometre method.”
Clothing, Laundry And Dry-Cleaning Expenses
Now, don’t go on a shopping spree. You can’t claim all clothing you might consider office-appropriate. Deductions for buying and cleaning work clothes are for industry-specific items. So while you could argue you only bought a pair of shoes for work purposes, it’d be difficult to prove they weren’t also for general use.
“The way to look at this is to consider if a chef is likely to wear their chef pants in any other situation than their occupation, which it’s likely not,” says Sommer. “Standard black pants and closed shoes may be worn for work, however, they can also be worn outside of work as well – their purpose isn’t specifically work-related.”
Working From Home And The COVID-19 Changes
This is still a major consideration for many people who have continued working from home in 2021. There are two methods for calculating what’s deductible when working from home: the fixed-rate method or the actual cost method.
The former is calculated at a flat rate of 52-cents-per-hour, while the latter involves keeping a comprehensive diary of all costs you incur working from home, which your employer would have otherwise covered. This includes utilities, internet, technology depreciation and other equipment costs.
The ‘COVID-hourly rate’ or ’shortcut method’ has been extended to included the 2020/2021 financial year, bringing the fixed-rate method up to 80-cents-per-hour. Sommer says this will be appropriate for workers who haven’t seen big set-up costs and whose employers have provided the necessary equipment and tech to conduct work. But the best way to tell what’s most cost-effective is to keep a cost diary and compare notes at tax time.
“You can tally up your hours and calculate the amount you can claim via the shortcut method, then compare that with any expenses you have incurred as a result of working from home. This will determine which method will provide you with the more effective deduction.”
Face Masks, Hand Sanitiser And Antibacterial Spray
COVID-19 has changed the way we work, not least in relation to the need to socially distance and maintain good hygiene practices. Work in an occupation where it simply isn’t possible to maintain social distancing, or you need to have physical contact with clients. You may be able to claim personal protection items such as face masks, hand sanitiser and antibacterial spray.
People who can claim include teachers, hospitality staff, retail staff, medical staff (including ancillary workers such as receptionists and cleaners), hairdressers and beauty therapists.
If you use a bag for work purposes – for example, carrying an iPad, phone, calculator, stationery, or anything else you need for work, you can claim a deduction for the cost of the bag. Be careful, though; the handbag needs to be fit for work purposes and actually be used for work purposes.
You might struggle to claim that new Gucci bag, but a more modest bag – genuinely used only for work purposes – should be claimable. A work briefcase, satchel or backpack should also be claimable for men.
Sunscreen, Sunglasses And Hats
If you work outside for long periods of the day, you may be entitled to claim the cost of sunscreen because of the dangers to your skin from prolonged exposure to the sun. Gardeners, farmers, building and construction workers and outdoor recreation staff, such as those who run outdoor fitness classes, are amongst those who could potentially claim sunscreen. Sunglasses and hats are also claimable by the same groups.
An Apartment In Another City
If you own an investment property, you can claim deductions against the rental income, but did you know that in some cases, you can claim deductions against a place you live in yourself? For example, under recent guidelines issued by the ATO, if you’re required to work away from home by your employer, your assignment in the other place is only temporary (so you haven’t actually relocated), and you choose to rent or buy an apartment in the other work location rather than relying on hotels or motels, you can claim a deduction for the work-related costs relating to the apartment, including either rent or interest on the mortgage, depending on whether you rent or buy.
If you’re a professional performer (actor, musician, dancer, magician, circus performer, etc.), there are all manner of strange deductions which you might look at claiming. Mime lessons? Absolutely. The cost of ceremonial swords? Certainly, if you’re a professional sword swallower.
Acting classes, dance classes, musical instruments, magic tricks might also be an option. If you make a living from stage or screen, a whole world of odd and interesting claims opens up to you.