- June 1, 2018
- Posted by: Sandeep Singh
- Category: Tax planning
If you’re an Information Technology Professional, it pays to learn what you can claim at tax time
To claim a deduction for work-related expenses:
- you must have spent the money yourself and weren’t reimbursed
- it must be directly related to earning your income
- you must have a record to prove it.
You can only claim the work-related part of expenses. You can’t claim a deduction for any part of the expense that relates to personal use.
You can claim a deduction for self-education expenses if your course relates directly to your current job – eg learning new software required to perform your work duties.
You can’t claim a deduction if your study is only related in a general way or is designed to help get you a new job – eg you cannot claim a deduction if you are a computer sales person who is studying to be a software programmer.
You can claim a deduction when you:
- drive between separate jobs on the same day – eg you work for two different employers
- drive to and from an alternate workplace for the same employer on the same day – eg a computer repairer who travels to multiple call outs per day.
You can’t claim the cost of trips between home and work, even if you live a long way from your usual workplace or have to work outside normal business hours – eg travelling at night to reboot computer servers.
There are limited circumstances where you can claim the cost of trips between home and work, such as where you carry bulky tools or equipment for work – eg computer peripherals such as large monitors. The cost of these trips is deductible only if:
- your employer requires you to transport the equipment for work
- the equipment was essential to earning your income
- there was no secure area to store the equipment at the work location, and
- the equipment is bulky – at least 20kg or cumbersome to transport.
If you claim car expenses, you need to keep a logbook to determine the work-related percentage, or be able to demonstrate to the ATO a reasonable calculation if you use the cents per kilometre method to claim.
You can claim a deduction for the cost of buying, hiring, mending or cleaning certain uniforms that are unique and distinctive to your job – eg clothing items you’re required to wear which have a logo that is unique and distinctive to your employer.
You can’t claim a deduction for the cost of buying or cleaning plain clothing worn at work, even if your employer tells you to wear it and even if you only wear it for work – eg black pants and a white shirt or a business suit.
Home office expenses
You can claim a percentage of the running costs of your home office if you have to work from home, including depreciation of office equipment, work-related phone calls and internet access charges, and electricity for heating, cooling and lighting costs.
You generally can’t claim the cost of rates, mortgage interest, rent and insurance.
Other common deductible work-related expenses
Other expenses you can claim a deduction for include:
- the work-related portion of phone and internet expenses if you have to make phone calls, send texts or use the internet for work.
- tools and equipment you are required to purchase for work. If the tool or equipment:
- cost more than $300 – you claim a deduction for the cost over a number of years (depreciation)
- cost $300 or less – you can claim an immediate deduction for the whole cost
- union and professional association fees.
Need more advice? For any questions you might have about the implications of tax deductions for you or your business, please contact us.
First published on ATO – 30 May 2018.