If you are looking for ways to bring down your taxes, deductions can be a great option. ATO offers you ample opportunity for deduction, especially for work-related tax deductions. In this blog, we will take a look at these deductions and will try to understand how you can claim the deductions.  However, these claims must adhere to specific criteria mentioned below:

Categories of Work-Related Tax Deductions

• The expense should be substantiated with records.
• The expense must be paid by you without any reimbursement.
• It should strictly relate to your job duties.
• If an expense serves both work and private purposes, only the work-related portion might be eligible for a deduction.

Vehicle and Travel

You can claim vehicle and travel expenses that fall under work-related travel. But remember, you cannot claim deductions on the expenses of your daily commute or private travelling. Moreover, you will have to keep a proper record of travel expenses to claim it. The eligible travel expenses that you can claim include the costs of travelling between different work sites and client meetings. It can also include travelling to other work-related locations. But make sure you keep track of the kilometres you have travelled, along with necessary and other job-related locations. It’s important to log kilometres travelled and keep receipts to substantiate these claims. Generally, the deductions are calculated either on the basis of these receipts or the cents per kilometre rate. Whatever is higher, you can claim that.

Clothing and Laundry

If you have specific clothing or apparel that you have to use for work, you can claim expenses on its laundry. But such clothing must be related to your job. For example, If you are a chef, you can claim clothing and laundry expenses on your chef’s white/ If you are working in the factory, you can claim clothing and laundry on your safety gear or jumpsuit. Moreover, if you work in a factory that deals with hazardous products, you have to wear protective gear. You can claim deductions on these protective gears. This includes helmets, safety glasses and sun protection clothing for fieldwork. If your employer demands you to wear attire that has the logo of your company, you can claim the deductions on them, too. Remember, you are generally eligible to deduct the expenses on the clothing that you cannot or do not wear outside work.

Home Office Deduction

There is also an option to get deductions for working from home. This includes a lot of deduction options when you use your home or a certain portion of your home for work purposes. You can claim expenses on office furniture and office supplies. The method to calculate these claims is different. The exact method for claiming these expenses can vary. For example, you can either go with a fixed rate per hour for home office space or claim actual expenses involved. But the second option might be a bit more confusing. So it’s better to stick to a fixed rate if you have a lot of small expenses. You can check out our comprehensive blog on Home Office Deductions for a better understanding.

Technology Use

Expenses incurred from using personal mobile phones for work purposes can be deductible. However, you must demonstrate that the phone was used for work-related activities and calculate the portion of the total use that pertains to your job. This might involve reviewing itemised phone bills to determine the percentage of work-related calls and data usage over a typical four-week period to project for the full year.

Professional Costs

Membership fees to professional associations and subscriptions to journals that are relevant to maintaining or improving skills required for your current job are deductible. This includes professional licensing fees, union dues, and subscriptions to industry-specific publications, provided they are necessary for your work.

Charitable Contributions

Donations made to registered charities with deductible gift recipient status are deductible. The amount you can claim depends on the type and value of the donation, which must be supported by documentation such as a receipt. Donations need to be unconditional gifts, meaning there should not be any benefit received in return for the donation to qualify as deductible.

Education and Self-improvement

Deductions for educational expenses are permissible if they have a direct connection to your current job role. This could include expenses related to courses, workshops, and seminars that aim to improve skills or knowledge necessary for your employment. Often, you can also claim related costs, such as travel to and from educational venues, if these trips are solely for the purpose of education and not mixed with personal activities. It is important to keep course receipts, travel documents, and other relevant records to substantiate these claims. The educational activities claimed should be expected to enhance your current job performance or contribute to an increase in income from your current occupation.

Tools and Equipment

You can claim deductions for tools and equipment that are required for your work. The deductible amount depends on the cost of each item; tools and equipment costing less than a specific threshold can generally be written off immediately in the tax year they are purchased. However, more expensive items might need to be depreciated over several years according to tax depreciation schedules. Essential records for these claims include purchase receipts and, if applicable, depreciation schedules. This category includes everything from small tools used daily in your trade to large pieces of machinery or expensive technology that are fundamental to your job duties.

Health and Safety

Expenses for personal protective equipment (PPE) are deductible when they are mandatory for your work and used solely in the performance of job duties. This includes items like masks, gloves, and sanitiser used during health crises such as the COVID-19 pandemic, as well as more traditional forms of PPE like hard hats or high-visibility clothing for construction jobs. The deductibility of these items is based on their necessity for ensuring safety while performing work-related tasks. Documentation needed might include receipts for the purchase of equipment and records of workplace requirements for health and safety gear.

Parting Thoughts

Tax deductions can significantly impact your return and are worth considering closely. Ensure you maintain robust records and consult with a tax professional to optimise your claims effectively. If you have any doubts or need any assistance, feel free to reach out. Our experts at Nanak Accountants & Associates are always up and ready to help you out.

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