With work-related expense claims high on the ATO radar, the Australian Taxation Office is stepping up to help and provide advice for taxpayers who aren’t quite sure what they can and cannot claim. The ATO have already flagged that over claiming of deductions is a big issue. The ATO wants tax payers to get right what they claim as tax deductions.
We understand tax time can be tricky and taxpayers often ask whether we have advice about what they can and cannot claim based on their job. The good news is that we do. The most popular topics include car, clothing, travel, working from home and self-education expenses. Getting the right information before you lodge your income tax return is helping our clients to get their claims right and avoid issues later on. We want every person to have the information they need to know whether they can make a claim, to get it right, and know what records they need to keep. Understanding what you can and cannot claim will help ensure that your income tax return is processed quickly and any refund is paid as soon as possible. Most people want to lodge their income tax return with the right information and helping people to do that in the first p lace i s t he most efficient way to operate.
Download the pdf file here: Tax Guide for IT Professionals
What you can and can’t claim
Each occupation has specific circumstances which affect what can and cannot be claimed. Here are some snippets from some ATO occupation guides. Remember, regardless of the occupation you are in, you can only claim the work-related part of expenses, and you must meet the three golden rules:
- You must have spent the money yourself and not been reimbursed;
- The claim must be directly related to earning your income; and
- You need a record to prove it.
Tax Deductions for Work-related Expenses: IT Professional
You can claim a deduction when you:
- drive between separate jobs on the same day – e.g. you work for two different employers,
- drive to and from an alternate workplace for the same employer on the same day – e.g. a computer repairer who travels to multiple call outs per day.
In limited circumstances you can claim the cost of trips between home and work, where:
- you had shifting places of employment (that is, you regularly worked at more than one site each day before returning home),
- you were required to carry bulky tools or equipment for work and all of the following conditions were met:
- The tools or equipment were essential for you to perform your employment duties and you didn’t carry them merely as a matter of choice,
- The tools or equipment were bulky – meaning that because of their size and weight they were awkward to transport and could only be transported conveniently by the use of a motor vehicle,
- There was no secure storage for the items at the workplace.
Please note, if you claim car expenses, you need to keep a logbook to determine the work-related percentage, or be able to demonstrate to the ATO a reasonable calculation if you use the cents per kilometre method to claim.
- You can claim a percentage of the running costs of your home office if you have to work from home, including depreciation of office equipment, work-related phone calls and internet access charges, and electricity for heating, cooling, and lighting costs. For a comprehensive guide on home office deductions, check out our Busy Person’s Guide to Home Office Running Expenses.
- You can claim a deduction for self-education expenses if your course relates directly to your current job – eg learning new software required to perform your work duties.
- You can claim a deduction for the cost of buying, hiring, mending or cleaning certain uniforms that are unique and distinctive to your job – eg clothing items you’re required to wear which have a logo that is unique and distinctive to your employer.
Other expenses you can claim a tax deduction for include:
- the work-related portion of phone and internet expenses if you have to make phone calls, send texts or use the internet for work,
- union and professional association fees,
- tools and equipment you are required to purchase for work.
- If the tool or equipment:
- cost more than $300 – you claim a deduction for the cost over a number of years (depreciation)
- cost $300 or less – you can claim an immediate deduction for the whole cost
- If the tool or equipment:
However, you usually cannot claim home to work travel, and you cannot claim clothes or shoes that are not uniform or are not designed to provide you with sufficient protection from the risk of injury at your worksite, even if the item is called ‘workwear’ or ‘tradie wear’ by the supplier.
Download the pdf file here: Tax Guide for IT Professionals
About Chan & Naylor
Established in 1990, Chan & Naylor has been a trusted partner for thousands of businesses and investors across Australia. Choosing Chan & Naylor Pymble means you’re not just selecting a service provider; you’re gaining a partner aligned with your business goals. You’ll have access to a dedicated client manager supported by a team of accountants that specialises in business tax and investments. Contact us today so we can discuss how we can help you.
Disclaimer
This article serves as general information only and may not account for the unique circumstances of individual readers. For personalised and strategic solutions tailored to your specific situation, we invite you to seek professional advice from Chan & Naylor. Our highly experienced team is dedicated to helping you navigate the complexities of Australian taxation, ensuring that your financial strategies align with the latest regulations. Contact us today to embark on a path of informed and customised tax planning for your property investments.
