With the end of the financial year fast approaching, it’s time to bust out the receipts and get sorted for Tax Time. While we’re not here to offer you advice in place of your accountant or financial advisor, getting familiar with what you can or can’t claim will set you up for a breezy tax return. Here are 11 tips to consider:
Your new home office.
Have you been exceeding your home data allowance or powering up the electricity bill with heating and lighting all day? For those that have been thrust into a new work from home environment, the costs associated with your new ‘office’ space probably haven’t crossed your mind. The great news is that the Australian Tax Office is acknowledging this new arrangement and making things easy. Work-from-homers can claim a flat rate of 80 cents for every hour of work they do from home due to COVID-19 through a ‘shortcut method’. This applies for the 01 July to 30 June 2021 period in your 2020-21 tax return. For more information on claiming work from home expenses visit the ATO site here.
The tools of your trade.
Sure, if you’re a tradie on the tools all day, you’re likely to be familiar with this aspect of your tax return. However, many of us use tools to carry out our day jobs, and this extends to things like computers, software, desks, chairs, bags, and bookshelves. Essentially, any asset that helps you earn income is classified as a tool and is tax deductable. Get to know your tools here.
That must-have work handbag.
If there ever was an excuse to buy that new handbag, this could be it. You may be able to claim a deduction for a handbag, briefcase, or satchel if you buy it with the purpose of carrying essential work-life items. Think laptops, tablets, or compendiums – not keys, a purse and lippy. Read up on what you can and can’t claim here.
The humble work trip.
While it’s likely to have been a fairly quiet year on the business travel front, if you’ve managed a work trip locally (or more recently across the ditch), the expenses you incur can be claimed as a tax deduction. These include things like accommodation, meals, and taxi fares. If you receive a travel allowance, you’ll need to declare this within your return, and it’s a great idea to keep a travel diary for longer trips. For more on work-related travel expenses, get the full run down here.
Hitting the road.
If your job involves a lot of driving to visit clients or suppliers, attending conferences or carrying out deliveries, be sure to put car expenses on your tax radar. You’ll need to keep track of your usage, either through a logbook or by using the cents per kilometre method in order to add this to your claim. Driving to and from work, while it might often feel like work, is sadly considered private use.
Dressed for success!
Wearing a uniform to work doesn’t only make for easy mornings, it can also make financial sense. If your workplace requires you to wear a distinctive uniform or specific items of clothing, you may be eligible to claim on both the clothes purchase and even cleaning, with work shoes often included. Items like non-slip nurse’s shoes and protective boots that are needed to carry out your job are generally able to be claimed as well. For wardrobe specifics, visit the ATO site here.
Support of charities.
Not all charity donations are created equal and able to be claimed upon. Tax deductions can be claimed on gifts or donations to organisations with Deductable Gift Recipient (or DGR) status. A DGR is an organisation that has been approved to receive tax deductable gifts, with every charity not necessarily being included. You can check the DGR status of an organisation here. Often crowdfunding campaigns don’t have DGR status, and generally, you can’t claim donations when you’re receiving something in return – this applies to things like charity chocolate or raffle tickets.
Claiming tax on your tax return.
With all the intricacies of tax returns, it’s sometimes better left to an expert. The good news is that if you’re enlisting the help of an expert – whether it’s a registered tax agent, barrister, or solicitor – their fees are actually tax deductible! Don’t worry, they’ll work out that part for you too.
If you’re popping a little extra aside to contribute to your superannuation, this could very well be tax deductible. To find out if this applies to you, the forms and nitty-gritty details are on the ATO site here.
Learning while you’re earning!
If you’re upskilling with further education while you work, you may be able to claim a deduction for your expenses. In a nutshell, the education must be related to your current work and either improve your skills or knowledge required for the job, or lead to an increase in income within your current job. This can include things like seminars, conferences or courses, and it’s possible to claim everything from course costs through to stationery and textbooks. If you think this could be you, read up on self-education expenses here.
Getting smart with investment property.
Finally, if you have a rental property, there are plenty of clever tactics for maximising tax benefits. In fact, we’ve written a whole blog about them here.
Above all, as tax time approaches, we recommend that you always seek help from your preferred tax professional. That way, you’ll receive expert advice relevant to your profession and have the assurance that you’re claiming correctly. First National Real Estate wish you a Happy Financial Year ahead!