“Good things come to those who wait” is the catchcry of the Australian Taxation Office this tax time, so ASIC’s MoneySmart has provided an updated guide for what can and can’t be claimed in 2019 for those yet to prepare their return.
When completing your tax return, you’re entitled to claim deductions for some expenses, most of which are directly related to earning your income, the guide stated.
According to ASIC and as Nest Egg has previously stated, to claim a deduction for work-related expenses: you must have spent the money yourself and not been reimbursed, it must be directly related to earning your income, and you must have a record to prove you paid for it.
When expenses meet the above criteria, there’s a number of things MoneySmart said can be claimed.
Vehicle and travel expenses
While this does not normally include the cost of travel between work and home, ASIC clarified that if an individual uses their car for work or works in different locations, they may be able to claim a deduction.
Clothing, laundry and dry cleaning
To legitimately claim a uniform cost, individuals were reminded that such clothing needs to be “unique and distinctive”.
This is usually claimable where it contains an employer’s logo, or is specific to an individual’s occupation and required to be worn, such as a yellow safety vest.
Gifts and donations
Organisations that are endorsed by the ATO as deductible gift recipients can be claimed as tax deductions.
MoneySmart has clarified that such donations must be $2 or more and must be claimed in the income year when the donation was made.
In some circumstances, an individual may elect to spread the tax deduction over five income years, it was outlined.
Home office expenses
Costs can include a computer, phone or other electronic devices used for work purposes as well as running costs such as internet service.
MoneySmart reminded that only the proportion of expenses that relate to work can be claimed, not the proportion that has been used privately.
Interest, dividend and other investment income deductions
Examples, according to ASIC, include interest, account fees, investing magazines and subscriptions, internet access and depreciation on your computer.
Self-education expenses
If the study is related to an individual’s current job, they can claim expenses including course fees, travel union fees, textbooks, stationery, internet, home office expenses, professional journals and some travel, it was explained.
Tools and equipment
If a person buys tools or equipment that aid in earning an income, they are able to claim a deduction for some of all of the cost.
Examples, as outlined by MoneySmart, include protective gear like sunscreen, sunglasses and hats if working outside, office equipment, safety equipment and technical instruments.
Other
Other items able to be claimed, according to ASIC, include: union fees, the cost of managing tax affairs, income protection insurance (if not through super), overtime meals, personal super contributions and other expenses incurred in the course of earning an income.
Some expenses may be tax deductible for specific occupations, including teachers, hospitality workers and tradies, it was also said, with further information available from the ATO.
Lodging your tax
According to the ATO’s myTax, if you wait until August or September to lodge online, most of your information will already be pre-filled in your return, saving you time and minimising the chance of making mistakes.
If you do lodge your own return, ASIC said you have until 31 October to do so. If you decide to use a registered tax agent, or are using a different agent to previous years, you will need to get in contact with them before 31 October as well.
Preparing for next year
ASIC highlighted that the ATO’s app includes a myDeductions tool. This allows individuals to record deductions, including work-related expenses, gifts and donations, as well as interest and dividends.
It also enables the storage of receipt photos and recording of car trips.
According to ASIC, the tool is able to be used by individuals and sole traders and can be uploaded directly to myTax or sent through to a tax agent.
Nest Egg has previously reported on ATO guidance around avoiding errors this tax time.
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