It’s tax time, which means the usual question of “what can I claim on tax” is thrown into conversation.
Of course, you can always talk to an accountant for specific details on lodging your tax return. Whether you’re doing your tax return online yourself, or paying your accountant an annual visit, we’ve included five things you may not have thought about.
1. Home office
What deductions can I claim because I’m an employee working from home?
As a general rule, some of the home office expenses you incur when working from home can be included in your tax return. To make claiming home office expenses easier, the Australian Tax Office (ATO) introduced a ‘shortcut method’ last year.
The shortcut method is temporary and can be used to work out your work from home deduction for the 2020-21 income year. It allows you to claim 80 cents per hour for each hour you work from home. This covers all your work from home expenses for this period, such as mobile phone, internet and electricity or gas for heating, cooling and lighting. The decline in value of equipment and furniture is also covered by the shortcut method.
If you use this method, you can't claim any other expenses for working from home.
There are other methods to calculate home office expenses, depending on your circumstances. Visit the ATO for more information on these.
Don’t get us wrong, we love cats too but when it comes to your tax refund, we’re not sure that a cat makes a good guard animal or sheep herder.
If you do use a dog for farming or security purposes for your business, any ongoing expenses may be tax deductible – including their vet bills and food. You can’t claim the purchase cost of a dog though as this is a capital expense, nor can you claim any expenses or purchase costs of a privately owned family pet.
Your rental property is a form of income, so you can generally claim a deduction on expenses related to the management, maintenance and upkeep of that property.
Expenses can include garden maintenance or a nice fresh coat of paint if you’re advertising to potential renters.
The same goes for ongoing expenses while someone’s renting your house. If you have to spend on the maintenance of your garden, or the house itself, those expenses are also often tax deductible, including lawn mowing if you’re paying someone to do it.
4. Sunscreen and sunglasses
If you’re in a job that requires protective gear, such as sunscreen and sunglasses, they’re tax deductible too.
This extends to other forms of protective clothing worn at work. So if you work on building sites or in construction, you can add hard hats, steel caps and occupation-specific clothes to your tax return.
Keep in mind that this doesn’t include general clothes that you buy and then wear to work. If the clothes or gear mean you can continue to do your job, they’re generally deductible, like a mandatory uniform. Dry cleaning costs for occupation-specific clothing, protective clothing and unique, distinctive uniforms can also be deductible, within certain limits of course.
5. Tax accountant fees
You might be able to do your tax return yourself online. For some, 30 June creates more headache of numbers, trawling through purchases from the past 12 months and an annual visit to an accountant.
If you fit into that second category, you might be surprised to learn that the fees you pay your registered accountant to lodge your tax return are tax deductible.
They include this in your return for you, which might make the annual visit a little easier to bear.
Generally speaking, claims must be directly related to earning your income, and you must have spent the money yourself and not have been reimbursed by your employer.
If your total tax deductions are over $300, you must also have written records to prove the purchases. These can include receipts, invoices, payment summaries, bank statements, contracts and rental records to name a few. If you’re unsure, it’s probably best to speak to an accountant to completely cover your specific circumstances.
It’s best to talk to your accountant each time you’re lodging a tax return, or check out the ATO website for more information.