Did you know that many tax deductions are industry specific? This means that certain occupations can legally claim tax deductions that others can’t. Just like every individual across Australia, tax deductions are just as distinct. So if you’re a public servant, what can you claim?
Many people make the mistake of thinking they can claim their car trip to and from work, when in reality the Australian Taxation Office (ATO) considers this to be a private expense. Every rule can be bent, and claiming car expenses isn’t any different. You can claim the cost of your travel between separate work places. So if you’re driving from job to job, or to and from an alternate work place for an employer, or to attend a meeting at a different location don’t forget to log that trip.
If you salary sacrifice your car, this means that your employer is covering your costs and you can’t make that claim.Pro Tax Tip: To claim work-related car expenses, you’ll need to keep a log book and use the ‘logbook’ or ‘cents per kilometre’ method to claim your deductions.
Home Office Expenses
Have you had to work from home because of lockdowns and restrictions? Even if you normally work from home, albeit five days or two days a week, you’ll be able to claim to cost of running your home office. These costs include depreciation of office equipment, work-related phone and internet charges, electricity for heating and cooling, and lighting.
You generally won’t be able to claim the cost of rates, mortgage, interest, rent or insurance unless you run your business from home and have a dedicated working space.
Don’t forget to keep a diary of your work hours. You’ll be able to claim your working from home expenses using the ‘short cut method’, the ‘cents per hour method’ or the ‘actual costs method’.
Pro Tax Tip: Keep your receipts, invoices and bank statements! You’ll need to back up your claims with proof of your expense alongside your diary.
The ATO does allow claims on clothing, but they have strict rules governing the types of clothing that are considered to be work-related. Black pants you wear in the office is considered to be personal, as they can be worn outside of work.
Work-related clothing includes high-vis vests, steel-capped shoes, sun protective gear if you work outside, or uniforms that are unique and distinct for your job. You can claim uniforms if they are clearly identified as an occupation or have the employer’s logo and you haven’t been reimbursed by your employer.
You can claim the cost as well as the cleaning, maintenance and repair of your work-related clothes.
Pro Tax Tip: You won’t be able to claim the repair or maintenance cost of normal everyday clothing even if you do wear them to work, for example a business suit.
It always pays to keep on top of your skills set. It helps your current employment and increases your skill set. Self education courses can be claimed if they relate directly to your job. For example, a first aid course, updates on your forklift license, a management course for a human resources worker.
Pro Tax Tip: Your course must be directly related to your job. If it’s only related in a general way, or if you’ve undertaken study for another role, then the course isn’t claimable.
Other Common Deductible Work-Related Expenses
Wait – there’s more! Just like well-written infomercial, there are other common tax deductions for public servants. You can claim the costs for seminars and conferences, technical or professional publications, unions and professional organisation fees.
Three Golden Rules
At ITP, we like to stick by the rules. It keeps both parties out of hot water with the ATO. That’s a good thing. The ATO stipulates three rules:
- The cost must be work-related. You can’t claim personal costs. If your expense is a combination of work and personal expenses, then you’ll need to work out the percentage of work-related costs
- You must be out of pocket. You can’t claim costs you haven’t incurred yet
- You must be able to prove your claims. You can do this by keeping your receipts, bank statements, contracts, tax invoices, log books and work diaries.
ITP Accounting Professionals have helped Australian individuals and small business with their tax affairs, bookkeeping and financial advice for 50 years. Phone 1800 367 487 and chat with a friendly professional today for help and advice.