The end of the financial year is approaching and that can only mean one thing; it’s nearly time to lodge your tax return. Now is a great time to take stock of all the money you’ve spent on work-related items during the course of the year. The question is, are you claiming everything you’re entitled to?
The general rule is that if you incur an expense as part of your job and aren’t reimbursed by your employer, you can make a claim. Depending on what you do for a living, that can give rise to some unexpected deductions.
Here are some of the things you may not know you can claim (plus a few things you can’t claim) for five of the most popular professions.
Tax tips for healthcare and social care
- If you’re required to wear a uniform as part of your role, the cost is deductible.
- You can also claim a deduction for the cost of clothing that you use at work to protect your ordinary clothes from soiling or damage, for example, laboratory coats and aprons.
- If you need protective clothing, such as non-slip shoes, they are deductible.
- Claim for conference expenses. As well as the cost of the conference itself, that can also include travel, meals and accommodation costs – even where the conference is overseas, though you might need to apportion the costs (and disallow the private bit) if you spent some downtime on the beach afterwards!
- Claim for professional subscriptions, whether to a professional body like the AMA or to a trade union.
- If you’re required to work overtime, you can claim for the cost of buying meals provided you have been paid an allowance by your employer.
- Agency costs: if you get your work through an agency, the cost is claimable.
- Many health care workers will need to use their own car as part of their job. That can include transporting patients, travelling between patient’s homes or travel from one medical facility to another; all such journeys are potentially claimable.
Tax tips for retail workers
- If you’re required to wear a uniform at work, the cost is deductible. If you wear conventional clothing, the cost isn’t deductible. Some retail workers in fashion stores are required to wear clothing from the particular store or brand they are employed by; but those garments are still classed as conventional clothing, so no deduction is available.
- If you spend time working from home – for instance preparing staff rosters at the weekend for the week ahead – you can claim a proportion of home running costs, either based on actual costs (in which case you’ll need receipts) or at a standard rate of 45 cents per hour.
- Claim a deduction for the cost of any work-related courses. That could include health and safety or first aid courses, management training or job related courses such as a Cert III in retail.
- If you travel between stores, you can claim the cost of travel from one work location to another. That could include any time you spend temporarily working from a different store to your regular workplace (perhaps providing holiday cover) as well as trips between stores delivering stock.
Tax tips for professional and admin workers
- The cost of a handbag or briefcase is claimable if you need it for work purposes, such as carrying paperwork or a laptop. Be careful though; the ATO may query whether a Gucci handbag is really required as part of your job!
- You can’t claim the cost of “conventional” clothing worn at work. That rules out suits and other business wear unfortunately. Clothing specific to the legal profession, such as the robes and wigs worn in court by barristers, are deductible.
- Annual practicing certificates for professionals such as lawyers can be claimed.
- If you work from home (at weekends or in the evenings for instance) you can claim a deduction for home office expenses. Either claim 45 cents per hour or claim a proportion of your actual costs, based on a diary of work use.
- If you travel as part of your work, you can claim the costs of your work-related journeys such as the cost of visiting clients or suppliers. If you use your own car, either claim 66 cents per kilometre up to a maximum 5,000 kms or keep a logbook and claim your actual expenses. You can also claim for parking, tolls and public transport if you don’t use your car.
- The cost of entertaining clients isn’t tax deductible.
- Sadly, you can’t claim the cost of club fees (such as the local golf or tennis club) even if you use your membership as a means of networking and meeting clients.
- Your professional indemnity insurance costs are claimable.
Tax tips for education and training workers
- Annual teacher registration fees are deductible.
- Claim the costs of references books or a professional library for the subject you teach.
- Prizes that you purchase to reward the achievements of your students and encourage future performance are claimable.
- Stationary, art materials, stopwatches and computer consumables including pens and toner cartridges are all deductible.
- Depreciation on technology costing more than $300, like computers, laptops, tablets, mobile phones and printers (items less than $300 may be written off immediately).
- Teacher aids.
- Conferences and courses linked to your teaching can be claimed, including associated costs such as travel and textbooks.
- If you mark homework or prepare lessons whilst at home, you can claim home office expenses such as a proportion of internet costs and the associated costs of any technology you use such as computers and printers as well as a portion of utility bills.
- If you pay for school excursions, such as sporting or camping trips, out of your own pocket and aren’t reimbursed, the costs are claimable. This can include meals, transport and accommodation costs.
Tax tips for construction & Manufacturing workers
- You can claim the cost of any tools or other work-related equipment that you’re required to buy for your job. You can claim an immediate deduction for any tools costing up to $300. Anything more expensive than that needs to be depreciated over the life of the tool.
- You can also claim a tax deduction for the cost of insuring tools and interest charged on finance taken out to buy tools and equipment.
- You may be able to deduct your expenses for buying and maintaining your uniform if you’re required to wear one and it has the businesses logo on it. “Ordinary” items of clothing like a plain khaki shirt that you could wear at another job or outside work would not qualify. A khaki shirt emblazoned with your employer’s name would qualify. The cost or protective items such as helmets, ear muffs safety goggles, sunglasses, sun hats and sunscreen can also be claimed.
- Trade union fees can be deducted.
- The cost of renewing any professional licences, registrations or subscriptions are claimable.
- The cost of self-education courses run by a University or TAFE (such as an apprenticeship course at a technical college), provided the course relates to your current job.
- You can claim for overtime meal expenses up to the amount actually spent where you have received a genuine overtime meal allowance under an industrial law, award or agreement.
Keep records! It doesn’t matter what you’ve spent; if you can’t prove that you spent it, you can’t claim it. So, gather together all those receipts and invoices. If you’ve lost a receipt, try to get a copy from the retailer. If that fails, a bank or credit card statement might do if you can clearly identify the item. Don’t try to claim if you don’t have the paperwork; you’re leaving yourself open to an ATO audit.
The best way to ensure your return is correct and that you’re maximising the deductions you’re entitled to is to visit a tax agent like H&R Block. Best of all, if you get a tax agent to help you lodge your return, the cost is itself tax deductible.
Mark Chapman is the Director of Tax Communications at H&R Block.
Each year, the Australian Tax Office sets its focus on particular areas they'll be honing in on as they review tax returns and where we're trying to reduce our taxes. This year is no different with cryptocurrency earnings, money made from new platforms like Uber, home office expenses and work-related claims on their hitlist.