TAX time. It’s either highly anticipated or a dreaded nightmare depending on how organised you are.
But the end of financial year can be a veritable bonanza if you know what you’re looking for.
Research from Officeworks shows the average Australian will miss out on $426 of unclaimed tax each year — or $1.65 billion nationwide. Most people are also largely in the dark about what they can claim, with 40 per cent of people saying they had no idea they could claim a tax deduction on petrol, while around one third didn’t realise home office expenses could reduce their tax bill.
Finance writer Justine Davies said you don’t have to be running a business to claim things like stationery or desk lamps at home.
“You just have to have a dedicated place to work at home … If you’re doing a few hours of work at home each week you can claim a number of things.”
“Unfortunately most people don’t think about it until after June 30 …[But] if people can think about it now as opposed to early July that will be more money in their pocket this year.”
Source: News Corp Australia
BASIC RULES FOR DEDUCTIONS
Generally speaking, the ATO states that to claim a tax deduction a purchase must have been made in the last financial year and be work-related rather than personal or domestic. It must be something you won’t be reimbursed for, and you may need a receipt as evidence. You can’t include things like speeding tickets or parking fines.
Provided this criteria has been met, workers can generally claim work-related vehicle and travel expenses, occupation specific clothing, laundry and dry-cleaning costs as well as gifts and donations made to organisations deemed to be deductive gift recipients.
Things like home office expenses, self-education costs, plus any journals or trade magazines can also be claimed, as can tools and equipment for work, and union fees. It’s also possible to get tax deductions on interest and dividends if any expense was incurred while earning them and expenses incurred in last year’s tax return.
But there are some additional extras depending on the industry you work in. Check out some of them below:
IF YOU WORK FROM HOME
Working from home means you’re potentially eligible to claim a number of expenses, depending on whether you run a business or just do a few hours a week. Things like gas and electricity costs, office items like a printer, scanner, computer, shredder and even a desk lamp can all be claimed, as can work-related phone expenses.
Home office furniture like desks, chairs, footrests, heaters or light fittings can also be eligible for a deduction, although these may need to be depreciated over time depending on the cost. Repairs to office furniture or equipment, as well as the cost of leasing any work-related items like computers or software may also be tax deductible.
IF YOU WORK IN MINING OR OUTDOORS
You can claim a deduction for the cost of buying, hiring, replacing or maintaining protective clothing worn at work such as fire resistant clothing, steel-capped boots, safety coloured vests or sun protection clothing.
Builders can also claim ear muffs, while police officers can claim bulletproof vests, Ms Davies said. Truck drivers are able to claim the cost of a portable fridge, while flight attendants can put rehydrating moisturiser down as an expense. Those in the fitness industry can claim the cost of aerobics DVDs.
If you work in the sex industry you can claim your toys and clothes. Picture: News.com.au
IF YOU WORK IN THE ADULT INDUSTRY
Adult industry workers can claim the cost of their costumes and lingerie as tax deductible, as well as items like condoms, lubricants, gels, oils and tissues used for earning and income.
Stage make up and dance lessons can also be claimed, but not general make up, hairdressing or the cost of a gym membership. Everyday clothes are also off-limits, although mobiles and car travel for work purposes as well as novelties and fetish equipment is deductible.
Source: News Corp Australia
IF YOU’RE A PROFESSIONAL ATHLETE
Anything used in the course of your on-field performance can be claimed, including hats, sunglasses and sunscreen, although shaving products and general hair care can’t be.
Fees to negotiate new contracts and travel expenses are also deductible, as are any fines and penalties received for on-field conduct. However fines, penalties and legal expenses for off-field breaches of conduct are not tax deductible.
Performance artists, mimes, clowns, entertainers can claim wigs, costumes and coloured contact lenses. Source: UK Mirror
IF YOU’RE A PERFORMANCE ARTIST
Performance artists can claim for work-related clothing costumes, for example a clown outfit, while dancers can claim the cost of special tights and shoes. Ms Davies said those who work in the performing arts can also claim the cost of tinted contact lenses.
IF YOU’RE A HAIRDRESSER
Hairdressers can also claim a capital allowance for the decline in value of their work equipment including mobile phones and fixed line telephones. They can also claim an allowance for hair cutting and styling tools or any compulsory work-related clothing.
IF YOU WORK IN AN OFFICE
Even if you spend your days in a fluoro-lit cubicle there could be something in it for you at tax time. Journalists are able to claim sunglasses if their work requires them to be outside, while lawyers can claim the cost of wigs worn for appearances in court.
“If you are doing a stock standard office job, definitely jump onto the ATO website because they have a whole heap of fact sheets depending on what you do,” Ms Davies said.
GET ORGANISED FOR NEXT YEAR
If this all sounds like a bit of a nightmare and you’re vowing to be more organised next year, Ms Davies said the best thing to do is keep your receipts in one place.
“They can be a nightmare to track down at the end of financial year … Just keep them, even if you don’t think they are claimable, just scan them and make a digital file it will make it so much easier to find.”
It’s also a good idea to jump onto online banking around June 30 and download your transaction history for the last 12 months which can provide a good record of what you’ve spent or any interest earned.
Beyond that, have a good look at the ATO website before filing your tax return to check out any information you need to prepare like group certificates and any other income from investments you might have received. Also check if you’re eligible for any rebates and make sure you lodge your tax return on time.
This advice is of a general nature and individuals should check the ATO website for a full list of possible deductions relating to your industry.