108 work-related expense claims that could improve your tax return in 2016/17

Posted In Tax Accounting
30 Jun 2017
108 work-related expense claims that could improve your tax return in 2016/17

You’ve finally found it!

An exhaustive list of work-related expenses you can (and can’t) claim for the 2016/17 financial year.

We had incredible feedback on the exhaustive 2015/16 list of work-related expenses we prepared last year and have made all the required updates to ensure you are kept informed on your deductions this tax time.

So, do you want more back on your tax return, feel you’re missing out on the deductions you’re entitled to or just curious what you can (and can’t) claim?

You are in the right place…

If you are:

  • An employee,
  • Earning an income, and
  • Paying tax

The following list of work-related expenses could improve your tax return.

But before you scroll to the expenses, it is important to know…

What is a work-related expense?

When completing your tax return, you’re entitled to claim deductions for some expenses, most of which are directly related to earning your income.

To be eligible to claim a work-related expenses:

  1. It must be job related
  2. You must have spent the money yourself and weren’t reimbursed
  3. You must have a record to prove it (there are some limited exceptions)

Note: Where expenses relate to both work and personal, only the work-related portion can be claimed. How much of the expense is allowed as a tax deduction will depend on the extent the expenses are incurred in earning the person’s assessable income.

Do you want to pay less tax?

Maximising the deductions and increasing the work related expenses you’re entitled too are both options for paying less tax, and the following list can help.

Other tax minimisation options, separate from work-related deductions, are included below the list.

The list of 108 work-related expenses…

This checklist is a guide only. The results may vary depending on individual circumstances.

#1. Admission fees: For lawyers and other professionals. (Disallowed as capital cost). NO

#2. Airport lounge membership: Deductions to the extent used for work-related purposes. YES

#3. Bank charges: Deductions are allowed if account earns interest. Not private transaction fees. YES

#4. Bribes to government officials and foreign government officials: Also exclude from the cost base and reduced cost base of CGT assets and cost of depreciating assets. NO

#5. Briefcase: If used for work and/or business purposes the cost is fully deductible if $300 or less. If more than $300, it must be depreciated. YES

#6. Calculators and electronic organisers: If used for work and/or business purposes the cost is fully deductible if $300 or less. If more than $300, it must be depreciated (for more see Tools, equipment and other assets). YES

Car Expenses:

#7. Using your own car: (including a car you lease or hire) in the course of performing your job as an employee, it is treated as a car expense. YES

#8. Someone else’s car: Used for work purposes, you may be able to claim the direct costs (such as fuel) as a travel expense. YES

#9. Cost of travel between home and work: Most people can’t claim the cost of travel between home and work because this travel is private. NO

When you can claim your vehicle:

  • Carrying bulky tools or equipment
  • Attending conferences or meetings
  • Delivering items or collecting supplies
  • Travelling between two separate places of employment (e.g. when you have a second job)
  • Travelling from your normal workplace to an alternative workplace and back to your normal workplace or directly home
  • Travelling from your home to an alternative workplace and then to your normal workplace or directly home (e.g. if you travel to a client’s premises)
  • Performing itinerant work.

#10. Child care fees: NO

#11. Cleaning: Of protective clothing and uniforms – see ‘Laundry and dry-cleaning’. YES

Clothing, uniforms and footwear:

#12. Occupation specific clothing: You can claim the cost of buying and cleaning occupation-specific clothing, protective clothing and unique, distinctive uniforms. YES

#13. Clothes no specific to your occupation: You can’t claim the cost of purchasing or cleaning clothes you bought to wear for work that are not specific to your occupation, such as a bartender’s black trousers and white shirt, or a suit. YES

#14. Ordinary clothes: You can’t claim the cost of purchasing or cleaning ordinary clothes you wear for work that may also protect you. For example, you can’t claim for normal, closed shoes, even though you wear them to protect your feet. NO

#15. Plain uniforms: You can’t claim the cost of purchasing or cleaning a plain uniform. NO

#16. Non-compulsory work uniforms: Shoes, socks and stockings can never form part of a non-compulsory work uniform, and neither can a single item such as a jumper. NO

Occupation specific clothing means:

  • Is not everyday in nature
  • Allows the public to easily recognise your occupation – such as the checked pants a chef wears

Protective clothing includes:

  • Fire-resistant and sun-protection clothing
  • Safety-coloured vests
  • Non-slip nurse’s shoes
  • Rubber boots for concreters
  • Steel-capped boots, gloves, overalls, and heavy-duty shirts and trousers
  • Overalls, smocks and aprons you wear to avoid damage or soiling to your ordinary clothes during your income-earning activities.

Work uniform means:

  • Clothing is unique if it has been designed and made only for the employer
  • Clothing is distinctive if it has the employer’s logo permanently attached
  • Clothing is not available to the public

#17. Coaching classes: Allowed to performing artists to maintain existing skills or obtain related skills. NO

#18. Computers and software: Software is deductible if it costs less than $300, otherwise deductible over 2.5 years. Except in-house developed software which is over four years (for more see Tools, equipment and other assets). YES

#19. Conferences, seminars and training courses: Allowed if designed to maintain or increase employee’s knowledge, skills or ability. YES

#20. Depreciation: Tools, equipment, and plant used for work purposes for each item costing more than $300. Items costing $300 or less are deductible outright in the year of acquisition (for more see Tools, equipment and other assets). YES

#21. Driver’s license: Cost of acquiring and renewing. NO

#22. Dry cleaning: Allowed if the cost of the clothing is also deductible. See also ‘Laundry and dry-cleaning’. YES

#23. Entertainment expenses: NO

#24. Fines: Imposed by court, or under law of Commonwealth, State, Territory or foreign country. NO

#25. First aid course: Provided it is directly related to employment or business activities. YES

#26. Gaiming license: Hospitality and gaming industry. YES

#27. Gifts of $2 or more: If made to approved ‘deductible gift recipient’ body or fund. See ato.gov.au for a full list. Gifts to clients are deductible if employees can demonstrate a direct connection with earning assessable income. YES

#28. Glasses and contact lenses (prescribed): These would qualify as medical expenses (see from 4.160). Deductible if ‘protective clothing’. NO

#29. Glasses and goggles: Protective only (for more see Tools, equipment and other assets). YES

#30. Grooming (prescribed): NO

#31. HELP/HECS repayments: NO

Home office expenses:

#32. Devices for work purposes: If you are an employee and required to use your computer, phone or other electronic device for work purposes, you may be able to claim a deduction for your costs. YES

#33. Performing work from a home office: If you perform some of your work from a home office, you may be entitled to a deduction for the costs you incur in running it. YES

#34. Device depreciation: Electronic devices and running costs are fully deductible if $300 or less. If more than $300, it must be depreciated. YES

#35. Home office occupancy expenses: As an employee, generally you can’t claim a deduction for occupancy expenses, including rent, mortgage interest, council rates and house insurance premiums. NO

Electronic devices include:

  • Computers
  • Phones
  • Printers

Running costs include:

  • For home office equipment, such as computers, printers and telephones
  • Work-related phone calls (including mobiles) and phone rental (a portion reflecting the share of work-related use of the line) if you can show you are on call, or have to phone your employer or clients regularly while you are away from your workplace
  • Utility expenses (heating, cooling, power and lighting)
  • The costs of repairs to your home office furniture and fittings
  • Cleaning expenses

#36. Income continuance insurance: Allowed only if the proceeds are assessable. YES

#37. Insurance – sickness or accident: When benefits would be assessable income. YES

#38. Interest: Allowed if money borrowed for work-related purposes or to finance income earning assets. Interest paid on underpayment of tax (eg. general interest charge) is deductible. Fines and administrative penalties are not deductible. Interest on capital protected loans deductible except for non-deductible capital protection component (see 14.600). YES

#39. Internet and computer equipment: Expenses allowed to the extent incurred in deriving individual’s work-related income, carrying on a business or earning investment income (eg. Share investing). YES

Laundry and dry-cleaning:

#40. Washing, drying and ironing eligible clothes: You can claim the costs of washing, drying and ironing eligible work clothes, or having them dry-cleaned. YES

#41. Laundry expenses: You must have written evidence, such as diary entries and receipts, for your laundry expenses if both: the amount of your claim is greater than $150, and your total claim for work-related expenses exceeds $300 – not including car, meal allowance, award transport payments allowance and travel allowance expenses. YES

#42. Dry cleaning expenses: You can claim the cost of dry-cleaning work-related clothing. YES

#43. For expenses exceeding $300: If your total claim for work-related expenses exceeds $300 you must have written evidence to substantiate your claim. YES

#44. Non-specific clothing: You can’t claim the cost of purchasing or cleaning clothes you bought to wear for work that are not specific to your occupation, such as a bartender’s black. NO

Occupation specific clothing means:

  • Is not everyday in nature
  • Allows the public to easily recognise your occupation – such as the checked pants a chef wears

Protective clothing includes:

  • Fire-resistant and sun-protection clothing
  • Safety-coloured vests
  • Non-slip nurse’s shoes
  • Rubber boots for concreters
  • Steel-capped boots, gloves, overalls, and heavy-duty shirts and trousers
  • Overalls, smocks and aprons you wear to avoid damage or soiling to your ordinary clothes during your income-earning activities.

Work uniform means:

  • Clothing is unique if it has been designed and made only for the employer
  • Clothing is distinctive if it has the employer’s logo permanently attached
  • Clothing is not available to the public

#45. Legal expenses: Renewal of existing employment contract. YES

Meals:

#46. Meals acquired when travelling: Meals acquired when travelling overnight for work-related purpose. YES

#47. Overtime meals: If allowance received under award. YES

#48. Work day meals: Eaten during normal working day. NO

#49. Meals acquired during day travelling: Meals when travelling (not overnight). NO

#50. Medical examination: Only if from the referral of a work-related business licence. YES

#51. Newspapers: Claims may be allowed in limited cases if the publication is directly related to income-producing activities. NO

#52. Parking fees and tolls: Includes bridge and road tolls (but not fines) paid while travelling for work-related purposes. YES

Photographs (performing arts – with income producing purpose):

#53. Maintaining portfolios: Cost of maintaining portfolio. YES

#54. Preparing portfolios: Cost of preparing portfolio. NO

#55. Practicing certificate: Applies to professional employees. YES

#56. Prepaid expenditure for tax shelter arrangements: They must be spread over the period in which the services are provided. YES

#57. Prepaid expenses: Non-business individuals and SBE taxpayers claim is fully deductible if services are to be performed in period not exceeding 12 months. All other taxpayers must apportion claim over the period of service. YES

#58. Professional association fees: YES

#59. Professional library: (books, CDs, videos etc) Established library (depreciation allowed). YES

#60. Professional library – New Books: Full claim if cost $300 or less (includes a set if total cost is $300 or less). YES

#61. Professional library – New Books: Depreciation if cost over $300 (includes a set if total cost is more than $300). YES

#62. Protective equipment: Includes harnesses, goggles, safety glasses, breathing masks, helmets, boots. Claims for sunscreens, sunglasses and wet weather gear allowed if used to provide protection from natural environment (see Clothing, uniforms and footwear for more). YES

#63. Removal and relocation costs: If paid by the employer, may be exempt from FBT, but deductible. NO

#64. Repairs: For work-related equipment. YES

#65. Self-education costs: Claims for fees, books, travel (see below) and equipment etc. only allowed if there is a direct connection between the course and the person’s income earning activities. No claim for the first $250 if course is undertaken at school or other educational institution and the course confers a qualification. However, that first $250 can be offset against private expenses, eg. travel, child minding fees, etc. YES

#66. Seminars: Including conference and training courses if sufficiently connected to work activities. YES

#67. Social functions: NO

#68. Stationery (diaries, log books etc.): YES

#69. Subscriptions / Publications: If a direct connection between publication and income earned by taxpayer. YES

#70. Professional associations: Maximum of $42 if no longer gaining assessable income from that profession. YES

#71. Sports clubs: NO

#72. Sun protection:: Claims for sunglasses, hats and sunscreen allowed for taxpayers who work outside. YES

#73. Superannuation contributions: Claims allowed in respect of employees. Substantially self-employed persons if their assessable income, reportable fringe benefits plus reportable employer superannuation contributions is less than 10% of their total assessable income from all sources, reportable fringe benefits plus reportable employer superannuation contributions total (see 19.026). No deduction is available for interest on borrowed monies used to finance deductible personal superannuation contributions. From 1 July 2017 the requirement that you derive less than 10% of your income from employment sources has been abolished and regardless of your employment arrangement, you may be able to claim a tax deduction for personal super contributions made. YES

#74. Supreme Court library fees: Applies to barristers and solicitors if paid on annual basis. YES

Tax agent fees:

#75. Fees: deductions can be claimed in the income year the expense is incurred. YES

#76. Travel and accommodation expenses: if you travelled to a tax agent or other recognised tax adviser to obtain tax advice, have returns prepared, be present at audit or object against an assessment. YES

#77. Cost of other incidentals: if incurred in having tax return prepared, lodging an objection or appeal or defending an audit. YES

#78. Technical and professional publications: YES

Telecommunications equipment:

#79. Telephones and other telecommunications equipment: (Including mobiles, pagers and beepers.) Cost of telephone calls (related to work purposes). YES

#80. Overtime meals: If allowance received under award. YES

#81. Rental charges: Rental charges (if ‘on call’ or required to use on regular basis). YES

#82. Installation or connection: NO

#83. Silent telephone number: NO

Tools, equipment and other assets:

Work related only or if used for both work and private purposes you can only claim the work related portion.

#84. Tools and equipment under $300: For items that cost $300 or less you can claim an immediate deduction for their cost. YES

#85. Tools and equipment exceeding $300: For items that cost more than $300 you can claim a deduction for their decline in value. YES

#86. Tools and equipment repairs: The cost of repairing and insuring can be claimed. YES

#87. Tools and equipment interest charges: Interest costs on money borrowed to purchase these items can be claimed. YES

Examples of tools, equipment, assets:

  • Calculators
  • Computers and software
  • Desks, chairs and lamps
  • Filing cabinets and bookshelves
  • Hand tools or power tools
  • Protective items, such as hard hats, safety glasses, sunscreens and sunglasses
  • Professional libraries
  • Safety equipment
  • Technical instruments

#88. Trauma insurance: NO

Travel expenses:

Including public transport, motor vehicles and motorcycles, fares, accommodation, meals and incidentals.

#89. No fixed work place: Where employee has no usual place of employment (eg. travelling salesperson). YES

#90. Working before leaving home: If actually working before leaving home (eg. doctor giving instructions over phone from home. Note: that this applies in limited circumstances only).
YES

#91. Transporting bulky goods: Must transport bulky equipment (eg. builder with bulky tools). YES

#92. Travelling from home to alternate work place: Travel from home to alternate work place (for work-related purposes) and return to normal work place (or directly home). YES

#93. Travelling from home to alternate work place: Travel between normal work place and alternate place of employment (or place of business) and return (or directly home). YES

#94. Travelling between two work places: YES

#95. Travelling to attend conferences or meetings: YES

#96. Travelling to deliver items or collect supplies: YES

#97. Travel expenses incurred while away overnight for work: Travel expenses you incurred for meals, accommodation and incidentals while away overnight for work, such as going to an interstate work conference (generally, you can’t claim for meals if your travel did not involve an overnight stay). YES

#98. Travel using a borrowed car: The costs you actually incur (such as fuel costs) when using a borrowed car or a vehicle other than a car for work purposes. YES

#99. Public transport costs: Air, bus, train, tram and taxi fares. YES

#100. Car hire fees: YES

#101. Travel between home and work: NO

#102. Travel between home and work: If ‘on call’NO

#103. Travel from home (which is a place of business) to usual place of employment: NO

#104. Travel accompanied by a relative: (may be allowed if relative is also performing work-related duties). NO

#105. Union and professional association fees: YES

#106. Vaccinations: NO

#107. Union levees: NO

#108. Watch: Unless job specific such as a nurse’s job watch. NO

That is the 108 work-related expense claims that could improve your tax return in 2016/17

Records you need to keep

During the financial year you’ll receive documents that are important for doing your tax, such as payment summaries, receipts, invoices and contracts.

Generally, you need to keep these for 5 years from when you lodge your tax return in case the ATO ask you to substantiate your claims.

Records you need to keep include:

  1. Payment summaries from payers, including your employer and the Department of Human Services
  2. Statements from your bank and other financial institution showing the interest you’ve earned
  3. Receipts or invoices for equipment or asset purchases and sales
  4. Receipts or invoices for expense claims and repairs
  5. Contracts

If your total claim for work-related expenses is $300 or more, you must have written evidence to prove your claims.

Paying less tax

Want to know what you can do, in-addition to your work-related expenses, to reduce your tax payable?

Common approaches:

  • Salary sacrificing
  • Income splitting
  • Negative gearing

Popular with cynics:

  • Ask your boss for a pay-cut
  • Buy more tax-deductible stuff
  • Donate to a registered charity

Tax Accounting considers all your available tax deductions and assess your potential for reducing the amount of tax payable each financial year. This article focuses on work related expenses only, both investing and financial structuring may present further deductions.

If you are looking for a Brisbane based accountant who will go out of their way to understand your situation, not outsource it, then have a look at the accounting services available from www.nexusprivateaccounting.com.au.

IT’S TAX

TIME

www.nexusprivateaccounting.com.au

TALK TO THE BRISBANE ACCOUNTANTS THAT CARE

For a personalised tax return experience that won’t cost you the earth…

Natasha Cook

Written by  Natasha Cook

Natasha holds a Bachelor of Commerce (Accounting Major), Graduate Diploma in Chartered Accounting, is a member of the Institute of Chartered Accountants in Australia and New Zealand, a registered Tax Agent and is currently studying a Diploma in Financial Planning. With a high attention to detail and an investigative mind, Natasha enjoys getting hands on gaining an intimate understanding of a client’s complete financial situation enabling her to interpret results accurately and provide informed advice that is forward focused.

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