Let’s ensure you are claiming the right work-related expenses as deductions on your tax return!
There are various expenses that will incur during one’s employment, some of the expenses might be recoverable from reimbursement or from the allowance given by the employer and some of them are not. You might think it is unfair that you have to pay for those expenses from your own pocket for work and so does the ATO. Below are some work-related expenses that you could claim as deductions on your tax return.
The general rule is that the expenses that are not reimbursed and closely related to one’s income-earning activity are deductible. Noted that all the related documents, like the written documents, receipts or invoices, should be kept as the support of your claim if the total work-related expenses are more than $300.
Work-related equipment, tools and other assets
These could be items you purchased for work that are general like the stationery or computer or it could be restricted to one’s occupation; like the stethoscope for a doctor or nurse, knives for chefs or instruments for musicians. The item that is worth $300 or more cannot be deducted immediately, instead it will be deducted based on the depreciated value of the goods throughout their useful lives which could be self-calculated or the figure that was given by the commissioners, alternatively you could check with your accountant for an appropriate estimated figure.
Self-education is important for almost every profession and the cost of pursuing knowledge is never cheap but the silver lining is that those expenses are tax deductible. Not only are the course fees, registration fees and the textbook cost but the fee payable under FEE-HELP (excluding the HESC-HELP), VET-HELP or OS-HELP are also deductible. The expenses that are directly related to self-education are also deductible, such as the computer expense and internet cost but those expenses must be apportioned accordingly if they were also used for private purposes.
Union fees, professional subscriptions
Working in a professional field sometimes means paying a professional body to be or maintain the certified qualification. Some of the professionals are also required to pay union fees to the specific union. Those costs not only enable someone to work in a specific job but could also be part of the tax deduction.
The expenses occurred for or during the work-related travelling could be claimed as part of the deduction. This includes the ticket fare, the accommodation cost and meal expenses along with other incidental expenses incurred as part of the employment duties to travel away from home. Other deductible travelling expenses include the running cost and the car hire fees if a vehicle was rented for the travel. If allowance was received for the travel, the expenses can still be claimed as a deduction, given it did actually incur. Related documents should be kept to support the claim unless the allowance was given by the employer.
Claiming deductions for work-related expenses might greatly reduce one’s taxable income but there must be a strong connection established between the expense incurred and one’s occupation.