There can be numerous deductions that can be claimed on your tax return each year depending on your occupation. The most common mistake people make is simply not holding onto receipts for items purchased during the year that are related to work.
Below is a list of tax tips that can help you maximize your tax refund.
Uniforms
If you have a uniform or clothing for work which has either the company logo or the name of products that you sell and you are required by your employer to wear it at work, then you may claim the cost of the clothing, alterations, repairs dry cleaning and laundry. Laundry can be claimed on the basis of up to $1 per wash to a maximum of $150 per year without receipts.
Other Clothing
Protective clothing such as overalls, steel capped boots, gloves, and aprons may also be claimed if they relate to your employment.
Sun Protection Items
If you work outdoors then you may be able to claim your sunscreen, hats and sunglasses.
Travel
Car travel may be claimed if you travel between two or more different jobs locations, to visit clients, carrying bulky tools i.e. power tools, ladders or, if traveling is a necessary part of your occupation i.e. Real estate agent, travelling salesperson etc. There are 4 different methods that can be used for claiming your car.
The Log Book Method
Under this method a log book recording business kms travelled during a minimum of 12 weeks must be kept. The cars odometer readings must also be kept. The business kms are then divided by the total kms travelled during the log book period to work out the total business travel as a percentage. That percentage is then applied against all expenses on the car ie fuel, registration, insurance, repairs, depreciation etc. All receipts relating to the car expenses must be kept except for fuel receipts. The ATO will accept an estimate of fuel costs based on the kms travelled, average fuel consumption and average fuel costs.
Set Rate Per Km:
You can claim up to 5000kms of business travel without receipts however you must some evidence to back up the claim ie Diary or log book of kms travelled. The rates per km are based on the size of the motor and can change per year.
One Third of Actual Expenses:
Under this method you can claim 1/3 of all your expenses on your car as long as you have your receipts and fuel estimates. You are not required to keep a log book but must have travelled at least 5000kms for business purposes.
12 % of Original Value:
Under this method you can claim 12% of the original cost of a car regardless of when the car was first purchased. If you have a lease then the claim is based on the market value of the car at the time of taking out the lease. The car must have travelled at least 5000kms for business purposes. No deductions for actual running expenses are claimed.
Other Travel
Other business travel by air, train, taxi, bus, parking fees, tolls, car hire and accommodation away from home etc may also be claimable. In some instances, such as train travel, you may not be able to retain your receipt. In such circumstances a diary recording the date and amount of the expense up to $10 per claim, would be acceptable up to a total limit of $200.
Self Education
In order to claim any educational courses they must be directly related to your current employment. If so then you may be able to claim course fees, text books and most other purchases related to your studies such as stationery. However you may not claim fees paid under HECS-HELP, however the tuition fees paid under FEE-HELP may be claimable. Travel to and from the course may also be allowable subject to some limitations.
Other Expenses
Typical expenses related to your employment may include briefcases, stationery, reference books, union fees, mobile phone calls, tools, computers, PDAs, smartphones, IPads, internet etc. Some expenses will have to be apportioned according to the business use expressed as a percentage.
If you work from home regularly i.e. School Teacher marking homework, and have a study or separate room at home set up specifically for work purposes then keep a diary for 1 month each year documenting the hours that you have worked there. You can then estimate roughly how many hours you would work over the entire year and claim up to $0.26 per hour as running costs for electricity and depreciation of furniture i.e. desk, chair etc.
Donations
Donations to registered charities are allowable if the amount donated is $2 or more. You are not able to claim if you purchase something from a charity such pens, badges or raffle tickets.
Tax Agent Fees
The fee that you pay your tax agent or accountant can be claimed as well as the travel costs to see them. A diary should be kept detailing the kms traveled to visit your agent.
Generally if you purchase something to be used at work you should retain your receipts and place them in an A4 size envelope or folder. At the end of the financial year you can sort through and itemise your expenses and either take them to your accountant or tax professional or seek clarification as to their deductibility.
