Working as a sports person has taken me around the world and to achieve goals I dreamed about as a child. When I began my career as an amateur, the costs were private, but as I gained skills and built my reputation I was able to turn my career into a professional vocation which mean that the money I earned became my income.
While some sporting professionals turn to other jobs after their sporting goals have been attained, as I have by starting my own small business Elite Cakes and working as a paramedic, others choose to stay in the sporting world by training others, working as a fitness professional or even opening their own gym.
If you’re a sporting employee, a sporting professional or a small business owner in the fitness or sporting industry, it pays to learn what you can claim when it comes to tax deductions.
First and foremost, no tax deduction can be claimed without the proper records. The Australian Taxation Office (ATO) won’t accept just any old scrap of paper. Your documents must contain certain information for it to be acceptable. Items you should keep as your records to prove expenses include receipts, tax invoices, contracts, bank statements, rental agreements and documentation from financial institutions. You may also need to keep log books, especially if you claim vehicle and working from home expenses.
These documents must be dated, show the supplier’s name, address and ABN, the item you bought, the amount you paid and the GST you paid. The good news is, you don’t have to tie up a desk drawer or filing cabinet with your documents. The ATO allows you to save an electronic copy, as long as it’s a true and clear representation of the original. A good idea because you’ll need to keep your records for five years after the date you incurred the expense, or from your last tax return, whichever is the latest.
To Claim A Tax Deduction
In order to claim your tax deductions, the ATO has three golden rules:
- You must have already incurred the expense
- The expense must be directly related to your work
- You must have proof
You’ll only be allowed to claim work expenses. Any expense that has a private element to the cost should be apportioned between business and private use. So, let’s look at some expenses you can claim!
A lot of sporting industry jobs are not at a singular location. You can find yourself crossing your city, your country or overseas for your job!
These tax deductions can get a bit tricky, because there are certain rules that need to be followed. I would advise to keep a vehicle log book to help back up your expenses as well as keep your receipts and other documents of your costs. Log books should be kept for 12 consecutive weeks. These expenses can then be averaged for the year, and can be used for 5 years unless your travel drastically changes.
To keep a log book, you’ll need to note your kilometres travelled the reason for your journey, the date, and your odometer reading at the start and end of your journey, as well as overall. You’ll need a separate log book for each vehicle you use. If you share a car, the person you share with can keep their own log book and claim their own expenses.
Tax deductions can be made when you drive between two separate jobs on the same work day, for example driving from a gym that you work at to your second job as a physical trainer. You’ll also be about to claim travel to and from an alternate workplace for the same employer, for example between gyms or training venues. Unfortunately, you can’t claim the cost of travel from your home to your work, even if you live a long way away from your work or work irregular hours.
There are two ways to claim vehicle expenses:
- Using the 72 cents per kilometre method up to a maximum of 5,000 kms
- The Log Book method based on the actual business use per vehicle per year
Because those working in the sporting industry do need to move about, travel is not limited to your private vehicle. Travel includes taxi fares, ride-share vehicles, trains, trams, buses and planes. Road costs, such as tolls and parking are eligible expenses. Other costs of travel include meals, accommodation, fees and incidentals. You’ll need to show you were away from home overnight and the reason for your travel, how you spent the money and how your trip was directly related to your employment. It’ll pay to keep a travel diary to help back yourself up.
If your employer reimburses you for your costs, you can’t claim the expenses. Keep in mind that receiving an allowance from your employer doesn’t mean you can claim a deduction.
Health and Fitness Costs
Health and fitness costs are where some sportspeople come undone, and what you can claim here can be surprising. Some costs you cannot claim are:
- Gym membership fees
- The cost of a program designed for managing your weight
- The cost of food substitutes for special dietary requirements
- The cost of vitamins, minerals, sporting supplements such as protein shakes.
These are all considered to be private expense. In fact, only elite jobs for people who need to attain higher than normal physical fitness such as those in the SAS or elite police people can claim a gym membership as a work expense. Strenuous jobs such as paramedics who work in specialist rescue operations, such as vertical access (cliff and building), white water survival or snowfield work and are regularly tested for fitness can also claim their fitness expenses.
Tools & Equipment
Everyone needs tools of their trade, and sportspeople are no different. Our tools come in the form of weights, sporting equipment and gym equipment instead of hammers, drills and power tools. If you use any tools or equipment to generate an income, the costs can be claimed.
If your work equipment costs $300 or less, you’ll be able to make a full claim in the same year you purchased it. If it costs more than $300, you’ll need to depreciate the costs. Your tax accountant can work out the depreciate schedule and how much can be claimed in a year.
Keep in mind, if you have any tools or equipment supplied by an employer, you won’t be able to claim these costs.
There aren’t many careers where you won’t need to update skills or gain certificate and accreditations to stay employed. You can claim the cost of a course, licensing and accreditations you need for your job. If you have to travel to do your course, incurred travel expenses, meals, accommodation, stationery or had to purchase equipment for your course – those costs can be claimed in conjunction with the course fees.
Be aware though, if your course is only generally linked to your current employment, or if you’re studying for a new job even if it is related, you won’t be able to claim these costs.
Other expenses that can be claimed include:
- Phone and internet
- Union and professional association fees
- Sunscreen and sun protection clothing if your job requires you to be outside to perform your duties
Tax can be confusing. The best bet if you’re unsure about anything tax-related is to seek the help of a professional. They can advise what you can claim and how you go about claiming your work expenses. Even better, a tax agent or tax accountant’s fees are 100% tax deductible when you lodge your next years’ tax return. I hope to see you on the sporting field, whether winning gold or helping others to reach their potential.