You may not be aware that you could be able to claim a tax deduction on your handbag at tax time. Shoes, make up and even dogs are just some of the other things you might be able to claim.
The main thing with any deduction is you need to be able to prove it is for work purposes. What you can claim and how much you can claim largely depends on the industry you work in. Luckily, the ATO has over 30 guides for specific industries.
We highly recommend you seek the services of a good, qualified accountant to maximise your tax deductions. A good accountant will take the time to understand your personal situation and give you strategic tax advice to minimise your tax obligations in the future. You’ll also have the peace of mind of knowing your return has been accurately prepared in compliance with tax laws in the event you are subject to an audit by the ATO.
Read on below for some of the more interesting deductions you may be able to claim.
1. Your handbag
As mentioned, provided it is used for work to carry your laptop, phone, stationery and other work supplies, you can claim it!
2. Shoes and clothing
In addition to claiming a tax deduction on your handbag, you may be surprised to know you may be able to claim shoes too. Non slip work shoes for nurses, specific shoes for flight attendants and work boots for various occupations are just a few examples of the types of shoes you can claim depending on your work. For work clothing, it must be a uniform such as work clothing with a logo on it to be able to claim it. You cannot claim a business suit.
Many people now carry out part or all of their work from home. Regardless of whether you have a full home office or work from the dining table, you can still claim for electricity, gas and lighting expenses while you work. Keep accurate records of it all.
4. A dog!
Before you get too excited, you can only claim a dog if it directly relates to work such as security or farm work. Expenses such as food and vet bills can be claimed by business owners. As for home based businesses, the family dog can be viewed as a grey area if your dog is used to secure the premises. Your gorgeous pug isn’t going to be claimable.
Whether you donate to a charity or make political donations, amounts over $2 are tax deductible.
6. Mobile phone
Do you use your personal phone for work calls? If so, you might be able to claim it. It’s important you keep accurate records as you can only claim the work portion of the bill, not your whole bill. For example, if around 50% of the use of your phone is for work, you can claim 50% of the bill.
7. AI tools
There is a new work-related expense that the ATO has given the green light to claim as a tax deduction this financial year – AI tools, such as chatbots and text-to-image generators like Chat GPT Plus and Midjourney. Just remember, you can only claim if you pay a subscription for these tools personally.
8. Courses and seminars
If you are attending courses, getting an education or even attending investment seminars, they can be tax deductible. Courses and self-education needs to be directly related to your job and investment seminars need to be for an investment you already have such as a rental property.
9. Car expenses
When using your car for work, wear and tear, maintenance and petrol can all be claimed. There are rules around what you can claim so it’s important to keep accurate records. A simpler option is the short cut method where you just keep a record of your business kilometres and claim 78 cents per kilometre at tax time.
10. Home office expenses
Setting up your home office can be costly, but you can claim a deduction or depreciation on everything you buy for it from computers to printer ink. Electricity and other expenses can also be included. Write down everything and claim what you can.
11. Union and membership fees
The total costs of fees associated with your employment such as union or membership fees for a professional body relating to your work are tax deductible.
12. Tax agent fees
When an agent prepares your tax return you can claim it the following year.
If your entire laundry load consists only of work clothing (such as uniforms), you can claim $1 per load. If it’s a mixed load of work and personal items, you can claim 50 cents per load as laundry expenses. You can also claim dry cleaning for general work clothing, but if the total amount is over $300 you will need proof.
You can’t claim the family caravan every time you take a trip, but if you travel for work and decide to use a caravan instead of paying for hotels and motels, you can claim it. You need to prove it is for business and not personal use.
15. Investment property expenses
Did you know most landlords can claim 2.5% depreciation on the cost of bricks and mortar? While investment properties have a plethora of deductions you can make, many landlords forget about depreciation. This is why it is so important to get the right tax advice with your investments. Get a depreciation report, which is tax deductible, and you may realise significant savings.
Salary sacrificing, boosting your super or splitting super with your partner are just a few of the tax-effective tips we share in this article on strategies to maximimse super tax savings. Get your super sorted and use it to your advantage both on your tax this year and in the future.
17. Sunscreen and makeup
Gardeners, builders, construction workers and anyone else working outside can claim their sunscreen. Further to the sunscreen, if you are required to work outdoors and your makeup has a sun protection element to it, you can claim that as well.
Industry-specific magazines and other subscriptions you pay for which relate to your work can be claimed on your tax.
19. COVID-19 related expenses
Employees in physical contact or close proximity with customers or clients may be able to claim a deduction for COVID-19 protection items such as gloves, face masks, sanitiser or anti-bacterial spray if they have paid for the items and not been reimbursed.
With all deductions, it is important you keep accurate records to prove what you paid, when you paid it and that it was used for work purposes. While some amounts might seem small, they all add up and can make a big difference come tax time. The sooner you track it, the more you can claim!