The Footnotes

FINANCIAL GODDESS

Tax time cheat sheet

Have you overlooked these easy tax deductions?

Guys, huddle in, I have a secret: I spend about a few hundred dollars a month to keep myself looking like a female human. So, unsurprisingly, my ‘savings account’ has become my maintenance account in 2015 – 16. But do not fear, as May rolls around, it means one thing, that it is almost June. And what does that mean my poor, dying, regrowth plagued  friends? It’s almost tax time. 

But year after year I hear of those people who, “got over $3000 dollars back…” (so annoying)

“….so she just booked a flight…” (I hate you)

“…which was on discount because it was tax time” (are you fucking kidding me)

“…and went to Europe for 3 weeks”.

So as the end of the financial year looms, and we all start hunting for expenses we can claim to reduce our taxable income I wanted to give you the 411 on what you can actually claim:

Firstly we should flag that last year 800,000 Australians received a letter from the Australian Tax Office offering help with claiming work-related expenses. I was one, and when i first opened the letter I began having heart palpitations because I knew my work uniform did not have a logo on it, that my converse shoes are technically not work shoes that I had never ironed my worked shirt let alone had it dry cleaned. But let’s be clear- this letter is nothing to worry about. It is part of an ATO education campaign about work related expenses. But as long as you are honest in your claims, and can provide documentation of your claimed expenses, you have nothing to worry about, something else to note here – is that if you are claiming something sub $50 dollars, no receipt is even needed.

 (Note…  you can actually claim up to $300 in total combined deductions without having kept any receipts.)

1. Eligible education expenses

Ever said, Ill just claim my textbooks? To be eligible for this you must have incurred the education expenses at time where you were working in the relevant industry. 

Work-related self-education expenses can only be claimed when they have a sufficient connection to your current employment. This means that if you are studying business while working part time in a pub, you are NOT able to claim your textbooks. If you are studying for your real estate licence, while working in the property industry – Cha – Ching. 

You need to be able to prove that your studies are required for you to retain your employment and that they are likely to help you increase your income.

If you fit this criteria then you are able to claim, home computers and laptops, printers, USB flash drives, home internet connections, computer software (educational use) and school textbooks, tutoring, equipment etc. Keep your receipts!

2. Uniforms

As a general rule of thumb, if you wear a work uniform that has a logo on it, it’s a claimable tax deduction. You can also claim the cost of laundry, dry cleaning, repairing and altering your work uniforms.

The way you calculate your laundry expenses will depend on your means of cleaning. If you wash your clothes at home, you are able to claim $1 per load.

$1 per load – this includes washing, drying and ironing – if the load is made up only of work-related clothing, and 50 cents per load if other laundry items are included.

Note: You must have written evidence (e.g. diary entries or receipts) if your claim for laundry is greater than $150 and your total claim for all work expenses (D1 – D5 on the tax return) is more than $300.

Do you buy makeup as a requirement for your work?

If you answered yes to any of the above, you may be able to claim your personal grooming expenses and increase your tax refund.

The Tax Office accepts deductions for sunglasses when they are used because a worker is exposed to the harmful effects of the sun, generally for a prolonged period. For example, a short walk between two work premises is not allowed. However, if you work on a building site where you spend all day outside or you wear sunglasses to reduce the glare while driving (if you drive the majority of the time for work), you are entitled to claim.

There is no limit on the expenditure for the sunglasses, however if they cost more than $300 and they are expected to last for longer than 12 months, you will need to claim the depreciation of the glasses on your tax return rather than the purchase price.

For industry specific clothing information go to HERE

3. Gifts and donations of $2 or more are tax deductible

The deduction or gift must be made by an individual or organisation to a donor (individual, company, trust or other type of tax payer). There are restrictions and it’s not possible to claim a deduction if you receive a benefit in return e.g. a chocolate, chance to win a car or reduced school fees. So if you dump old clothes or furniture at the Salvation Army or similar charity drop and they are still in good condition, get a written receipt to claim – as you’ve legitimately made the contribution.

4. Vehicle and license expenses

If you use your car for work, or are self-employed and use it for business purposes, you can claim mileage for each errand. Keep a logbook. Also, if your job requires that you hold a certain vehicle license, such as a Heavy Rigid truck license, then the license fee is also claimable.

Have you used your car for work this year, but forgot car expenses to keep a logbook? Don’t stress! You may still be able to claim work-related car expenses on this year’s tax return.

Keeping track of these expenses over the financial year can seem like more hassle than it’s worth, but there’s a number of apps that will help you so you’re all good to go, come the time to lodge your return. Tracking your income, spending and payments has become pretty easy and straightforward with these apps able to collect stats about your spending, analyse your finances and also help you with your spending plans, offering advice on where to save money.

5. Mobile phones

Is your mobile number on your business card, or on your email footer? Do you use it to make work called? Well, Cha- Ching you can claim a deduction for the cost of work-related phone calls you make. 

You can also claim a deduction for your phone rental if you can show you were on call or you had to call your employer or clients regularly while you were away from your workplace.

For example, Arabella uses her mobile phone for work purposes, she is on a $129 plan a month. At least once a year, she prints out her account and highlights the work-related calls she has made. She makes notes on the account for the first month about who she is calling for work – for example, her manager and clients. Out of the 300 calls she has made in a four-week period, she works out that 120 (40%) of the calls are for work and applies that percentage to the monthly bill (129). The other two months that she reviews are consistent with this.

As Arabella was only at work for 46 weeks of the year (4 weeks annual leave) (10.6 months), she works out her work-related mobile phone expense deduction as follows:

10.6 months x $129 x 40% = $$546.96

5. Home Office Expenses 

Do you ever find yourself working from home? How about checking and responding to your work emails in the evening or on the weekend? If you do, then you may be able to claim the cost of using your personal computer as a tax deduction.  The ATO allows employees who work from home occasionally to claim part of their home office expenses.

Even better, if you work entirely from home (either self-employed or as a home-based employee) you can typically claim the ”occupancy cost” of your home office space as a tax deduction. These expenses can include software, equipment, furniture and a percentage of your rent/mortgage and electricity.

For example,

Sally lives on her own and pays $60 per month for her internet connection that is in her name. She estimates that 40% of her home internet use is for work purposes.

  • 40% of $60 = $24 per month
  • $24 x 12 = $288 per year

Sally can claim $288 of Internet deductions on her tax return this year.

Tax time cheat sheet
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