It’s tax time and everyone is eager in maximising tax refund. After a hard year of work, it is natural for everyone to expect a good refund to possibly fund for their upcoming travel plans. However, it is important to ensure the claim is correctly made to avoid potential tax audits and penalties for incorrect claim.
The general rule is that you can only claim expenses that are work related and cannot claim anything that falls under ‘private’ in nature.
Lets look at some common examples
Use of Private Car
Traveling to/from work by any mode of transport is not claimable. However, if you use your personal vehicle to visit the clients or carry tools of trade (bulky and weighing more than 25 kgs), you can claim your vehicle expenses either by cents/km method or actual expenses method. For the latter, you must maintain a 12-week logbook.
Meals
Meals are a private expense and cannot be claimed as a work expense. However, where your employer provides you with an Overtime Meal (Cribb) allowance and included in your Gross Taxable Earnings, you can claim the meal expense using the set rate given by ATO as a deductible expense.
Travel
Any private travel expenses are not claimable. Where you did work travel and spent your own money towards food and/or accommodation, you can claim the same either by actual expenses or reasonable travel expenses rate set by ATO. It is important to remember that you cannot claim if your employer has reimbursed the expenses.
Work from Home
ATO has simplified the claim of work from home but insists that a diary record should be maintained showing the days and hours you worked from home. It’s a rather simple calculation of total hours x 67c per hour that you are eligible. Furthermore, you could be eligible to claim on various tools of trade, for example headsets, keyboard, mouse, desk/chair, etc. However, under this method you are unable to claim mobile, internet, power, and stationery costs as they are included under the 67c/hour method.
Uniform / Laundry
Only work uniform which has the employer’s logo in clothing are eligible for deduction. General clothing such as shirts and pants don’t fall under this category. Some occupations require occupation specific clothing (for e.g. workers in cafeteria wear a black apron) which are eligible under this category even if they don’t have your employer logo. Washing expenses can also be claimed only if the washing is for an employer uniform and not general clothing.
Summary
Eligibility to claim expenses in your personal tax return depends on various factors and your occupation type. It’s important to remember that expense claims should be supported by receipts. With modern technology, it’s easy to capture receipts in a smart phone and save it in a google drive folder for Tax claims. This will make it easier for making your claim more efficiently.
Consult a Tax Specialist
Tax is a complicated world, ever changing and can be confusing for many. It’s easy to make a mistake if you are doing a tax return yourselves, and it is also possible you are missing out on some important claims that you are unaware of. It’s also not a good idea to follow your co-worker’s or friends advise when it comes to completing your tax return. Similar to seeking medical advice from a doctor or a legal advice from a lawyer, tax return preparation is best done by seeking advice from a tax expert.
Whitehorse Accountants
At Whitehorse Accountants, we have expert resources with over more than 25 years of experience in taxation and accounting to provide the best advice to get you the correct refund you are eligible for. We don’t just complete the tax return; we engage with you to provide advice on tax saving opportunities that you may have been missing out in the past. If you are interested in our taxation services, please free to call us at (03)-8905-4936 to fix an appointment (or) fill up your details at New Client Sign-Up form and we will revert back to you.