With the deadline looming to lodge your tax return, it's time to start thinking about any expenses you incurred over the financial year as part of your work that you may be able to claim and thereby reduce your taxable income.
In general, expenses are claimable when:
- You spent the money and weren’t reimbursed by your employer
- The money spent was a work-related expense
- You have an official record of the expense – such as a receipt, bank statement or diary entry (though in some cases you may not have to show evidence if your total claim for work-related expenses is $300 or less)
- If the cost was for both work and personal use, for example home internet, you can only claim a portion of the expense.
The Australian Taxation Office (ATO) provides detailed categories of expenses you can claim on its website, which you can refer to for details on what you can claim. Some of them are outlined below.
1. Vehicle and travel expenses
The ATO has very specific conditions around what you can and can’t claim for trips between home and work and between workplaces. These conditions may not be as straightforward as you expect, so it’s important to read the relevant section on the ATO website.
If you’re using your own car, a car you lease or someone else’s car for work purposes, you should be aware of the changes to calculation of car expenses deductions effective this financial year.
2. Clothing, laundry and dry-cleaning
If you purchased occupation-specific clothing, protective clothing or work uniforms, you can claim for the money spent, as well as the costs of cleaning those clothes.
But if your employer gives you an allowance for clothing and cleaning, you must show the amount of allowance as part of your income on your tax return.
3. Gifts and donations
Check if any organisations you donate to, for example your favourite charity, have the ATO’s ‘deductible gift recipient’ status so you can claim for the gifts donated. A gift can be money or other financial assets, such as property and shares.
Any amount you donate above $2 can be claimed back. For other assets, different rules apply depending on their type and value.
As the name implies, you must have given the gifts voluntarily without receiving material benefit or advantage. This means you can’t claim items such as raffle tickets or fundraising dinners.
4. Home office expenses
Tools and equipment such as computers, furniture and phones used for work purposes are claimable, either immediately or over a period of time (via depreciation of the asset).
You can also claim for costs incurred from running your home office, including heating, lighting, repairs and cleaning if some of your work is from home. But make sure you’re only claiming the work-related portion and not the portion for private use. If in doubt, speak to a trusted tax adviser.
5. Investment income deductions
You may have received interest payments on your savings, dividends from your investments in shares, rental payments from an investment property, or some other type of investment income.
If so, you may be able to claim for costs related to producing these incomes, such as account-keeping fees and interest charged on money borrowed to buy stocks or rental properties.
Money paid to seek advice on changing the mix of your investment can also be claimable.
6. Educating yourself
If you enrol in eligible education courses and your study is work-related, you may be able to claim a deduction. Take note of the conditions you must meet and the types of expenses you can claim for this.
7. Other deductions
There are a few other things you may be able to claim back on as well that are also considered deductible expenses.
- Books, periodicals and digital information
- Cost of managing your tax affairs
- Union fees and subscriptions to associations
- Personal super contributions
- Income protection insurance
- Interest charged by the ATO
- Overtime meals
8. Industry-related deductions
Some occupations may have more specific circumstances than others when it comes to claiming expense deductions. The ATO has a list of occupations that you should check against to see what particular spending related to your job is deductible.
Finally, keep all your records from when you lodge your tax return. The ATO may ask you to provide evidence to support your claims.