5 Tax Deductions you need to watch.
It pays to learn what you can claim at tax time.
Every financial year the Australian Taxation Office (ATO) targets certain work expenses and pays particular attention to false claims.
Here’s 5 Tax Deductions that are coming under the spotlight in 2019:
1. Working from Home Expenses
If you’re an employee who regularly works from home, you may be able to claim a deduction for expenses relating to that work.
Possible expenses include: running expenses (lighting, heating, cooling, cleaning, furniture repairs) and phone and internet expenses.
For more information on how these expenses are calculated, visit www.ato.gov.au/workingfromhome
2. Clothing and Laundry Expenses
You can claim a deduction for the cost of buying and cleaning: occupation-specific clothing, protective clothing and unique, distinctive uniforms.
Whilst you don’t need receipts for claims up to $150, the ATO can ask how you calculated your claim. They may even ask your employer if you have a required uniform.
For more information on compulsory and non-compulsory uniform and laundry expenses, visit www.ato.gov.au/clothingandlaundry
3. Car Expenses
If you use your own car for work purposes, you can claim a deduction using the cents per kilometre method or logbook method.
If you use someone else’s car for work purposes, you can only claim for direct costs you pay for – such as fuel.
The ATO will also be looking at car expenses that have been salary sacrificed.
For more on car expenses, visit www.ato.gov.au/carexpenses
4. Travel Expenses
It pays to find out before you go!
Travel expenses include:
- Transport expenses are deductible when you travel in the course of performing your duties. This includes the cost of driving your car, flying, catching a train, taxi or bus.
- Accommodation, meals and incidential expenses are deductible when you travel in the course of performing your duties AND are required to be away from home overnight.
If take a work trip that includes personal travel you can only claim the work-related portion. This includes airfares!
It also pays to keep a Travel Diary to record your travel movements (where you were, what you were doing and the times activities started and ended) – by the time you lodge your tax return, you may have forgotten the details!
For more information on things to remember, visit www.ato.gov.au/travelexpenses
5. Self-education Expenses
Self-education expenses are deductible when the course you undertake has a sufficient connection:
- to your current employment and maintains or improves the specific skills or knowledge you require in your current employment, or
- results in – or is likely to result in – an increase in your income from your current employment.
For more information on course expenses and what you can claim, visit www.ato.gov.au/selfeducation
If you claim any of the above work expenses, it’s important to keep detailed record. And remember, for a work expense to be deductible, you need to have spent the money yourself and not been reimbursed by your employer.
We will discuss what’s claimable and what’s not at your Tax Interview. But, the main message to avoid the tax man clamping down on you is – be honest – and keep receipts.
Queries? Please contact Patrick Rowan & Associates. tel: 03 5221 7655
This is a general summary only. For more information, please speak with your Accountant or visit the ATO website.