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20 tax deductions you didn’t know you could claim from the ATO

Jul 15, 2016

HANDBAGS, make-up, guard dogs and garden gnomes are among the deductions that may help deliver Australians a handy tax refund in the next couple of months.

The Australian Taxation Office says employers must have sent workers their payment summaries by now, and for a majority of people a refund awaits, but many taxpayers do not know just how many things they can claim.

Deakin University department of accounting senior lecturer Dr Adrian Raftery says most items costing less than $300 can be deducted in full in one year. Anything above that needs to be claimed over time, you need evidence of your spending, and you have to apportion it between work and private use.

From the weird to the lucrative, here are 20 potential tax deductions that may surprise you.


Work outdoors? Slop on some sunscreen and claim a tax deduction for it. It’s good to see that the ATO promotes being sun-smart.


If your make-up has sun protection and your job requires you to work outdoors, claim away. “It has to have a sun protection component to it, not just ordinary makeup,” Dr Raftery says.


“The ATO came out a few months ago saying you could legitimately claim a handbag, providing you can demonstrate it is used for work purposes,” Dr Raftery says. That means using your handbag or briefcase to carry iPads, phones, calculators, stationery and other work-related items.


If you’re studying subjects related to your current paid employment, it’s tax-deductible after the first $250. You also can claim travel expenses for the cost of getting to and from your place of education.


Many people take work home with them. If you don’t want to claim comprehensive home office expenses, you can still claim for electricity used when doing work at home. “You can claim 45c per hour on your home electricity use,” Dr Raftery says.


There’s a pile of home office items that can be claimed including inks, stationery, printers, computers, chairs, desks, paper shredders and rubbish bins. “Scan your eyes across the room,” says Dr Raftery. “It will trigger something.”


Work boots are an obvious deduction, while flight attendants are allowed to claim for a second pair of shoes that are the same as their uniform but more comfortable.


Do you subscribe to work-related magazines and journals? You can claim them. Some occupations — such as media — can claim pay-TV subscriptions that help them keep up with events.


Property investors looking to add some gnome-ish fun for their tenants can claim for the cost of garden gnomes. BMT Tax Depreciation CEO Bradley Beer says gnomes are among hundreds of potential deductions for landlords, ranging from heated towel rails to clocks and fish tanks.

Mr Beer says the ATO has a list on its website that can be tricky to find, while BMT has an app listing the deductible items. “Then you have to come up with a value and cost that the Tax Office accepts,” he said. A quantity surveyor can do this for you, and their report is tax-deductible.


The most lucrative potential tax deduction for property investors is not the carpets and curtains, but writing down the bricks and mortar. For most people it’s a 2.5 per cent annual tax deduction on the cost of the building — but not the land, which does not depreciate.

For an investment property costing $300,000 to build, that’s a welcome $7500 tax deduction every year.


Claiming a tax deduction for dogs is allowed for people who use their dogs for work, mainly in security services and farming. H & R Block director of tax communications Mark Chapman says food and vet costs can be claimed for business use, and the dog is viewed as a capital asset “so you can write it off over the life of the animal”.

Family pets are not claimable, and it’s a grey area if your dog is helping to secure a home-based business. “If it’s a poodle, you might struggle,” Mr Chapman says.


Mr Chapman says an H & R Block client who travels a lot for work decided to buy a caravan rather than continually fork out cash for motel rooms. In such as case, a caravan is a tax deduction, “but you would have to allocate it to business use and personal use” he says.


Sorry fellas, but this is only for people who work in the adult entertainment industry. In fact, the ATO has a special free guide about what can be claimed by adult industry workers. The list includes dance lessons, hair care, oils, lingerie and costumes, and it’s one of almost 40 free ATO guides available for workers in specific industries.


General financial advice is not deductible, but specific investment advice may be. If you pay a tax agent to do your return, that cost is claimable — but they will know that.


If you pay income protection insurance premiums, make sure to claim them. It’s the only form of personal insurance that is tax-deductible. Other types of insurance — such as car and home insurance — only can be claimed when the insured asset is used for income-producing purposes, such as a work vehicle or rental property.


If you use your car for work, make a note of it and you can claim either 66c per kilometre up to 5000km in one financial year, or the more detailed logbook method where every expense is recorded and apportioned. The ATO has an app that can help you track your work use via GPS.


If you donated money to a political party in this month’s federal election, remember to claim it. Candidates themselves also can claim their costs of contesting an election.


You are allowed to claim for the costs of attended investment seminars, such as those related to investment properties. “But you must already have the investments — you can’t be thinking about them,” Dr Raftery says.


Concur director and tax agent Paul Mather says workers can claim the costs of their phone and internet expenses that are work-related. “No evidence is needed but, if the percentage seems unreasonable, the tax office may investigate,” he says.


If you have a work uniform the ATO lets you claim the cost of keeping it clean. It says you can claim $1 per load for washing, drying and ironing, or dry cleaning costs if you have the receipts. You need written evidence if your total claim for work-related expenses is more than $300.

Original article published here in on 15th July 2016.


"I use my car for work and was claiming reimbursement from my company at .66c per km. After I hit 5000kms in Nov 2016, they started to deduct tax at 35%. Will I get that portion back at in my next return? And do I now need to keep a log book to claim all of my future Kms, or should I keep getting my reimbursement from work, and claim the taxed portion in July 2017?"

By: Clover on Jan 26, 2017 10:56PM

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