It’s building up to tax time and you may wonder what you are entitled to claim in regards to your individual income tax return. I am constantly asked the question from family and friends, so here is a brief overview of some deductions you might consider talking with your accountant about:
Work Related Motor Vehicle Expenses/Travel
Do you use a personal motor vehicle for business purposes as an employee? If this is the case, you may be entitled to a Motor Vehicle deduction in your income tax return. The Australian Taxation Office allows for deductions when travel takes place between business workplaces or to and from client locations, however, travelling to and from work to your private residence is deemed to be specifically excluded in calculating any deduction. To substantiate your business travel, it is advised a logbook is kept to record the business kilometres travelled as well as invoices for running costs such as fuel, registration & insurance.
Work Related Clothing & Laundry
Does your field of work require you to wear occupation specific or protective clothing? Where this is the case and you outlay money on such expenditure you may be entitled to a deduction. Protective clothing such as helmets, safety glasses, steel capped boots and high vis vests are some examples. Clothing such as the checked pants a chef wears, a nurse’s uniform, and a judges robe are some examples of occupation specific clothing. Where you wear specific or compulsory work uniforms, you may also be entitled to a laundry deduction. In order to comply with ATO substantiation requirements we advise that you keep invoices of all expenditure on work related clothing you incur throughout the year.
Self Education Expenses
Are you engaged in both work and study which will improve your formal qualifications and performance in your job? The ATO allows for self education expenditure deductions in regards to course fees, seminar fees, text books and stationary to name a few which are directly linked to your occupation. For example, the cost of a mechanic attending a seminar for new technologies in the mechanical industry has a direct link between cost of education and work. While the ATO does allow for deductions of self education expenses, they do also specifically exempt deductions for HECS & VET HELP repayments. Again, we advise that invoices are kept for all self education expenditure for substantiation.
Home Office Expenses
Do you designate a portion of your personal residence for work purposes? If this is the case you may be eligible to claim deductions in regards to running costs for home office equipment such as computers, printers, telephones and costs of heating and cooling. You are required to keep invoices for all expenditure as well as a diary for any expenditure costing $10 or less. As claiming home office expenses may have other tax implications, we advise you speak to your accountant at Optima for advice in this regard.
If you feel any of the deductions listed apply to your situation, be sure to speak with your accountant at Optima to help get the most out of your Individual Tax Return.
Accountant – OPTIMA PARTNERS