It’s that time of year again when you need to start thinking about your tax. But before you rush to lodge your return, it’s important to double check what you can and can’t claim.
With a few exceptions, clothing is a private expense. Conventional clothing (including footwear) can’t be deducted as a work-related expense, even if your employer requires you to wear it and you only wear these items of clothing at work. ‘Conventional clothing’ is everyday clothing worn by people regardless of their occupation – for example, jeans and drill shirts worn by tradespeople or apprentices.
You can claim a deduction for costs you incur to buy, hire, repair, replace or clean clothing, uniforms and footwear you wear at work if it’s:
You can claim a deduction for expenses you incur when you travel for work and sleep away from home overnight in the course of performing your employment duties. Expenses you can claim include your accommodation, meals and expenses which are incidental to the travel (incidentals). Receiving an allowance from your employer doesn’t automatically entitle you to a deduction.
In all cases, you must be able to show you were away overnight, you have spent the money, the travel was directly related to earning your employment income and how you worked out your claim.
You can claim the cost of using a car you own, lease or hire (under a hire-purchase arrangement) when you drive
You can’t claim the cost of normal trips between home and work, even if you live a long way from your usual workplace or work outside normal business hours.
In limited circumstances, you can claim the cost of trips between home and work, where:
– the tools or equipment are essential to perform your employment duties and you don’t carry them merely as a matter of choice
– the tools or equipment are bulky – meaning that because of the size and weight they are awkward to transport and can only be transported conveniently by motor vehicle
– there is no secure storage for such items at the workplace.
To claim a deduction, you must keep records of your car use. You can choose between the logbook method or the cents per kilometre method to work out your deduction.
You can claim a deduction for:
If a tool or equipment costs:
You can only claim a deduction for the work-related use of the item.
You can’t claim a deduction for tools and equipment that are supplied by your employer or a third party.
Use the myDeductions tool in the ATO app to make keeping records easier. The app is particularly useful for people who use their car for work. At tax time, the data from the app can be sent directly to your tax agent or uploaded into myTax.Check the ATO’s industry specific guides to understand what you can claim at ato.gov.au/occupation21.