Tax Talk - Claiming work-related expenses and business expenses

It’s that time of year again – Tax Time! The question everyone has been asking, what expenses are tax deductible?

Source: ATO

When it comes to preparing your tax return, it pays to know what items are tax deductible.

As an Individual, when working out whether an expense is tax deductible there are three Golden Rules that must be met:

1. Have you spent the money yourself and not been reimbursed by your employer?
2. Does it directly relate to the earning of your income?
3. Do you have a record to prove it?

Keep in mind; if the expense was for both work and private purposes, then you can only claim a deduction for the work-related portion.

Similarly, if you operate a small business, to help you work out if a business expense is tax deductible, you must apply these three Golden Rules:

1. You must have spent the money for your business – it cannot be a private expense
2. If the expense is for a mix of business and private use, you can only claim the portion that relates to your business, and
3. You must have records to prove it

What expenses are not tax deductible?

If your work has reimbursed you for an expense, then this is not a tax deductible item. The ATO can seek information from your employer, if it suspects you have claimed a deduction for an expense for which you have already been reimbursed.

Another tip is to remember to keep thorough records, including any receipts to help substantiate your claims.

For more information on what expenses you can claim and what paperwork is required visit  ato dot gov dot au forward slash deductions or have a chat with your tax agent. 

 

If you operate a small business, you can’t claim a deduction for expenses that aren’t directly related to earning business income, such as, entertainment expenses, traffic fines and money you earn from a hobby.

For more information on what business expenses you can claim and visit ato dot gov do au forward slash business deductions or have a chat with your tax agent.

Anything else you think we should know?

Even though circumstances can change each year, there are a number of resources available to provide relevant tax time information to taxpayers.

If you need some help with your tax return, a free Tax Help service is available in many local community centres. Some centres can assist people who speak languages other than English. Call thirteen twenty-eight sixty-one to find your nearest Tax Help centre.

You can also speak with a tax officer in your native language by phoning the Translating and Interpreting Service on thirteen fourteen fifty and ask to be connected to thirteen twenty-eight sixty-six.