Firefighters are born protectors. They risk their lives saving people, houses, property, lives and livelihoods. They are the heroes of our community, keeping us safe from accidents to natural disasters. There’s no doubt that when it comes to emergencies, being thorough is a must. The same can be said for claiming every eligible tax deduction when it comes to tax time. You need every piece of equipment ready at hand in order to save people and property, and you also need every available tax deduction to lower your overall tax bill. The devil is in the details, so let’s see how we can save you some money. After all, why pay more tax than you have to.
There are a range of eligible claim that can be made to reduce your income tax, which include:
- Car expenses – you can claim the costs of your car if you travel between workplaces once you reach your place of work for the day. For example, you may travel from your job as a fire-fighter to your second job as a first aid trainer. You can also claim the cost of travelling between alternative workplaces on the same day. For example, you may travel in your own car from your station to a job training event for school children at a primary school, or to provide teachers with fire hazard training. The good news is you can claim the cost of travelling to the event and then home from the second place of work. Be sure to claim your expenses using the log book method or the cents per kilometre method.
- Clothing – you can claim the costs of purchasing, repairing and cleaning your work-related and protective clothing. Protective clothing can include high-vis vests, steel-capped boots, protective gloves and aprons. You can claim a compulsory uniform, such as a polo-shirt sporting the company logo. If your employer reimburses your costs, you can no longer claim. You can claim the cost of laundering your work clothing at a rate of $1 per load if you’re only washing work clothing, or 50 cents per load if you wash a combination of work and personal clothing. Don’t forget to keep a laundry diary of your loads.
- Meals – you can claim the cost of meals if you receive an overtime meal allowance under an industrial law, award or agreement and it’s included in your assessable income.
- Travel – if you travel overnight for a work-related reason, you can claim the costs of a hotel stay and meals as well as traveling costs such as a bus, train, plane, parking and road tolls.
- Other expenses – phone and internet, union fees, professional subscriptions, costs of renewing licenses, self-education and the costs of managing your tax affairs are eligible tax deductions.
Some items are just not eligible expenses when it comes to the Australian Taxation Office (ATO). It pays to understand what these are so you don’t make a mistake on your tax return. At least you may receive a fine, at the most you’ll trigger a dreaded audit which is best to be avoided at all costs.
- Car expenses – unfortunately, you can’t claim the cost of driving from home to your place or work, even if it’s for an emergency, regardless of the distance, shifts after normal work hours or on the weekend. There are few exceptions to this rule. In limited circumstances, you can claim the cost of your car when you travel from your home to your work, but only if you carry bulky tools or equipment for work. The tools and equipment must be essential to perform your job, they must be too awkward to carry any other way and there must be no storage available for the equipment at the workplace.
- Clothing – You can’t claim the cost of clothing that can be worn casually. For example, even if your boss requires you to wear black pants, they are considered to be private because they can be worn at other times. They are not exclusive to your job.
- Meals – although you may be on your shift over a meal time, you can’t claim the cost of food, drinks or snacks you consume over your normal shift even if you receive an allowance. Only meals consumed during overtime for which you are paid an overtime meal allowance can be claimed.
- Travel – if your travel is paid for by your employer, you won’t be able to claim. If you receive an allowance for travel you’ll still need to show evidence in the form of receipts and a travel diary to claim.
- Other expenses – you can’t claim the costs of keeping fit, such as a gym membership, renewing or getting your driver’s license, skin-care products or attending social work events.
How To Claim
The ATO requires evidence for any sort of expense. You need to keep more than receipts to claim some of your costs. Car expenses, for example, must be backed up with a log book to claim the actual cost method or a diary to claim the cents per kilometre method
To read how to claim your car expenses, read: Car Expenses – What You Should Know To Reduce Your Tax
The logbook method requires you to keep a valid logbook to work out the work-related percentage of your costs. The cents-per-kilometre requires you to show how you worked out the kilometres of work-related travel you did.
Both methods require receipts and other forms of proof to back up your claims. You’ll need to keep evidence of a 12-week consecutive period which can be averaged for the year. Your logbook can be used for 5 years provided you continue to record your cars odometer reading on 30 June each year for those 5 years. If your circumstances change, don’t forget to start another logbook and start fresh!
Working From Home
If you claim working from home costs, you’ll need to keep a working-from-home diary to catalogue your hours. You’ll need to detail the hours worked, the date and your tasks. You can keep your work diary for a 4-week consecutive period which can be averaged for the year.
Other forms of proof
The ATO might ask for further evidence of your expenses over and above receipts, logbooks and work diaries. Other evidence includes bank statements, contracts, tax invoices, written communication from your financial institutions and rental agreements.
Three Golden Rules
The ATO has 3 rules when it comes to claiming tax deductions:
- You must be out of pocket before you can claim
- The cost must be for work. No private expenses are allowed to be claimed
- You must be able to prove your claims
ITP Accounting Professionals have helped Australian individuals lodge their tax returns for over 50 years. There’s not a lot they don’t know about tax. They have the experience to claim every single deduction you’re eligible for to lower your tax. Phone 1800 367 476 and chat with a friendly professional today.