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Claiming work related tax deductions

You may be able to claim deductions for work-related expenses you incurred while performing your job as an employee.

However, there are two basic rules you have to satisfy before claiming deductions, as follows:

1. The expense must not be private or domestic in nature.

2. You must be able to substantiate your claims for deductions with written evidence if the total amount of deductions you are claiming is greater than $300.  If the total amount you are claiming is $300 or less, you still need to be able to show how you worked out your claims, but you do not need written evidence.

Below are the usual work related expenses that an employee can claim:

Work-related Car Expenses

You can claim car expenses if you used your car at work such as going to clients as in the case of salesmen, real estate agents and the like.  You can also claim car expenses in going to your second job direct from your first job. Another instance where you can claim car expenses is when you use your car to carry bulky tools or equipment (such as an extension ladder or cello) which you use for work and cannot leave at work.

There are four methods you can choose from to work out your car expenses.  These are:

1. Cents per kilometer method

2. Logbook or actual expenses method

3. 12% of original value method

4. One-third of actual expenses method.

The most commonly used methods are the cents per kilometre methods  and the logbook or actual expenses method.

Work-related Travel Expenses

Travel expense claimed in this category are public transport, including air travel and taxi fares, bridge and road tolls, parking fees and short-term car hire.  Expenses for motorcycles, utility trucks and panel vans are also claimed under travel expenses.

Work-related Clothing, Laundry and Dry-cleaning Expenses

You can claim the cost of a work uniform that is distinctive (such as one that has your employer’s logo permanently attached to it).  You can also claim occupation-specific clothing, protective clothing  and footwear to protect you from the risk of illness or injury, or to prevent damage toyour ordinary clothes, caused by your work or work environment.  Items may include fire-resistant clothing, sun protection clothing, safety-coloured vests, non-slip nurses’ shoes, steel-capped boots, gloves, overalls, aprons, and heavy duty shirts and trousers.  You can claim the cost of protective equipment, such as hard hats and safety glasses.

You cannot claim the cost of purchasing or cleaning plain  uniforms or clothes, such as black trousers, white shirts,suits or stockings, even if your employer requires you to wear them.

You can claim for the cost of laundry or dry cleaning of your uniforms or protective clothing.  If the cost of your  laundry is $150 or less, you do not need to provide written evidence.

Work-Related  Self-Education Expenses.To claim a deduction here, the course you are studying must be directly related to your income earning activities such as an Accounts Clerk studying a course in Accounting.  Examples of expenses you can claim are textbooks, stationery, student union fees, student services and amenities fees, depreciation of your computer, and certain course fees.  An amount of $250 is deducted from your total self-education expenses.

Other Work-related Expenses

These expenses include the following:

· Union fees and subscriptions to trade, business or professional associations · Overtime meal expenses

· Professional seminars, courses, conferences and workshops

· Reference books, technical journals and trade magazines· The work-related pro-portion of computer, phone and home expenses

· Tools and equipment and professional libraries

You can claim overtime meal expenses only if they were paid under an industrial law, award or agreement and the meal allowance is shown in your PAYG Summary and you have included the amount of the overtime meal allowance as part of your assessable income.  For 2014 year, you can claim $27.70 per meal without need of written evidence provided that the total claim does not exceed the amount of meal allowance shown in your PAYG Summary.

Mike Alvarez, a CPA and Registered Tax, is the director of QA Audit and Tax Services Pty Ltd, a CPA Practice.  He is also an ASIC Registered SMSF Auditor.  Tel. 02 9628 2933.




Mike Alvarez, a CPA and Registered Tax Agent is the director of QA Audit and Tax Services Pty Ltd, a CPA Practice, telephone (02) 9628 2933.