Tax time is drawing near, which means it will soon be time to fill out those ever-so-confusing Australian Taxation Office (ATO) papers.
Whilst filling out your tax information, you also get the opportunity to claim something on your tax return, which means you include allowable expenses in your tax filing.
This reduces your overall taxable income, which then lowers your tax bill.
And for those not having to pay out of pocket, this means free money! (Well, not really, but girl math!)
Still need some help? We’ve made the job easier for you by asking the experts exactly what you can and can’t claim on your tax return…
What can I claim on tax?
WHO has spoken exclusively to accountant Madina Radinovich at PKF Sydney on all things tax time.
We first asked Madina what you can claim in relation to work. And here’s what we found out:
For those who work from home (even if it’s just a couple of days a week), you can claim expenses if they are linked to earning your income.
To claim these home expenses, you must:
- Be working from home to fulfil your employment duties, not just carrying out small tasks (like taking calls or checking emails occasionally).
- Incur additional running expenses because of working from home.
- Have records that show you incur these expenses.
If you are reading this and thinking, ‘Yes, I tick these boxes,’ these are some examples of what you could claim:
- Electricity and gas for heating/cooling and lighting whilst at home.
- Phone and internet.
- Stationery and office supplies.
- Office furniture, like chairs and desks.
- Software equipment like computers, monitors and laptops.
- If you have a dedicated home office, you may also be able to claim: mortgage and rent expenses, and cleaning expenses.
For those who don’t ever work from home, don’t fret! You can potentially claim:
- Tools that you may need to do your job (scissors, laptops, tradesman tools, occupation-specific items).
- Vehicle and travel expenses.
- Mobile phone (only if used for work purposes, can be claimed for work-related usage).
Check the full ATO work-related expenses checklist here.
What counts as a work-from-home expense?
According to our expert, Madina, a WFH expense is, “Any expenses incurred because of fulfilling your employment duties.”
But there are rules around claiming items if you also use them for personal use.
You can only claim the work purpose portion. For example, if you buy a laptop for $1000 and you use it 80% for work and 20% for personal, then you can only claim $800.
Some extra tips to note:
- For items under $300 or less, you can claim the whole thing in the same year you bought it.
- If the item is above $300, you can’t claim the whole amount at once.
“Rent is claimable if you are running a business from home or your home is your principal place of business, and if you have a clearly defined work area,” Madina says.
You can calculate how much to claim based on your floor area used for business, plus hours of use.
It should be noted that claiming rent or occupancy expenses may affect your Capital Gains Tax (CGT) when you sell your home.
What can’t you claim on tax?
There are some surprising no-nos that people tend to claim but actually can’t.
General work clothes like blazers, black pieces, suits, dresses, or shoes can’t be claimed unless they are a uniform with a logo or are protective gear.
Some other big no-nos include:
- Home office décor – rugs, plants, artwork.
- Makeup and haircuts (unless it’s part of your job; an actor could claim stage makeup).
- Commuting to and from work.
- Pets at home, even if the dog keeps you company in your home office.
Can I claim work clothes?
As mentioned above, you can claim work clothes if it is a uniform or if they are protective gear.
Sorry, but that chic blazer that you wear at work (and out on the weekend) can’t be claimed.
You can claim laundry expenses if you are washing work clothes (occupation-specific or compulsory uniform).
This means $150 of laundry costs can be claimed without a receipt, but anything above that will need receipts.
Can I claim Spotify or Netflix if I use them for work?
You can claim the work-related portion if it is directly related to earning an income.
If you’re a full-time employee in a marketing or editorial team and watch shows at night to stay culturally informed, it would not be considered deductible.
Self-employed content creators and freelancing consultants who create video content are able to claim the work-related portion.
Are professional development courses tax-deductible?
These are deductible if the course, professional development, or book is directly linked to improving your skills in your current role.
You can’t claim if it’s for a new job or a career change.
Can I claim a handbag?
You can only claim a handbag if you use it more than 50% of the time for work purposes, like carrying laptops, tablets, diaries, or work documents.
So if it’s a work handbag, then yes!
Can I claim makeup for work?
No, sadly. For us office girls who just want to look pretty at work, you can’t claim makeup on tax.
Specific roles where grooming and makeup are tied to your income (performers, actors, etc), then yes, it can be claimed.
Can I claim a Nintendo Switch?
Only if you use it more than 50% for work purposes, like a gaming attendant or professional game reviewer.
Are there any changes to ATO rules this year?
There will be a heavy focus on fake claims this year, so make sure you do your research.
Accountants are also tax deductible, so if you use one this year, keep the receipts as you can claim them next year.
Keep a record and logbook of working from home arrangements and work-related travel if you intend to claim on any WFH expenses.
The car expenses rate has also increased from 85c per km to 88c per km if you are using your car for work-related purposes.
Do I need a receipt to make a tax claim?
Yes, you always need a receipt, just in case you get audited; make sure you keep these receipts for five years!
If you are unsure about what to claim or have any questions, access the Australian Taxation Office site here or seek advice from a professional.
