Everyone wants to pay less tax right? To do that you need to know what you can claim… and what you can’t.  It’s not about cheating the system, or creative accounting.  It’s all about claiming what you’re entitled to. That’s why we’ve developed the Is it Deductible checklist. 

Please note this is a 2012 version preview. Please click on the link below to get the latest version. Yes, it is free, too.

Item

 

Admission Fees

For lawyers and other professionals. Disallowed as capital cost.

O

Airport Lounge Membership

Deductions to the extent used for work-related purposes.

P

Annual Practicing Certificate:

Applies to professional persons and other contractors who must pay an annual fee to practice in their chosen field. 

P

Bank Charges:

Deductions are allowed if account earns interest. Not private transaction fees.

P

Briefcase:

If used for work and/or business purposes the cost is fully deductible if $300 or less. If more than $300, it must be depreciated.

P

Calculators and Electronic Organisers:

If used for work and/or business purposes the cost is fully deductible if $300 or less. If more than $300, it must be depreciated.

P

Child Care Fees

O

Clothing, Uniforms and Footwear:

·       Compulsory uniform:

Uniform must be unique and particular to an organization (e.g. Corporate uniform)

·       Non-Compulsory uniform:

If on a register kept by the Department of Industry, Science and Tourism.

·       Occupational specific:

The clothing identifies a particular trade, vocation or profession (e.g. Chefs and nurses)

·       Protective:

Must be used to protect the person or their conventional clothing. May include sunscreen.

P

Club Membership Fees

O

Coaching Classes:

Allowed to performing artists to maintain existing skills or obtain related skills

P

Computer and Software:

Software is deductible if it costs less than $300, otherwise deductible over 2.5 years. Except in-house developed software which is over 4 years from 1 July 2008.

P

Conferences, Seminars and Training Courses:

Allowed if designed to maintain or increase employee’s knowledge, skills or ability.

P

Item

 

Conventional Clothing

O

Depreciation:

Tools, equipment, and plant used for work purposes for each item costing more than $300. Items costing $300 or less are deductible outright in the year of acquisition.

P

Driver’s Licence:

Cost of acquiring and renewing.

O

Dry Cleaning:

Allowed if the cost of the clothing is also deductible. See also ‘Laundry’.

P

Entertainment Expenses

O

Fines:

Imposed by court, or under law of Commonwealth, State, Territory of foreign country (s26-5).

O

First Aid Course:

Provided it is directly related to employment or business activities.

P

Gaming Licence:

Hospitality industry.

P

Gifts / Donations of $2 or more

If made to approved ‘deductible gift recipient’ body or fund. See ato.gov.au for a full list. Gifts to clients are deductible if employees can demonstrate a direct connection with earning assessable income.

P

Glasses and contact lenses (prescribed):

These would qualify as medical expenses. Deductible if ‘protective clothing’.

O

Glasses and Goggles:

Protective only.

P

Grooming

O

HELP/HECS Repayments

O

Home Office Expenses:

If you perform some of your work from your home office, you may be able to claim a deduction for the costs you incur in running your home office.

Running  Expenses:  For  example,  electricity,  gas  and  depreciation  of office  furniture  (e.g. desk,  tables,  chairs,  cabinets,  shelves, professional library).

Occupancy Expenses: For example, rent, insurance, rates and land tax. Deductible only to the extent that home or study is used as a place of business.

P

Income Protection Insurance:

Allowed only if the proceeds are assessable.

P

Insurance – sickness or accident:

When benefits would be assessable income.

P

Interest:

Allowed if money borrowed for work-related purposes or to finance income earning assets. Interest paid on underpayment of tax (e.g. General interest charge) is deductible. Fines and administrative penalties are not deductible. Interest on capital protection loans deductible except for non-deductible capital protection component.

P

Item

 

Internet and Computer Equipment:

Expenses allowed to the extent incurred in deriving individual’s work-related income, carrying on a business or earning investment income (e.g. share investing).

P

Laundry and Maintenance:

Allowed if the cost of clothing is allowable (see ‘work related clothing’). Reasonable claims of up to $150 do not need to be substantiated.

P

Legal Expenses:

Renewal of existing employment contract.

P

Meals:

 

• Eaten during normal working day

O

• Meals acquired when travelling overnight for work-related purpose

P

• Meals when travelling (not overnight).

O

• Overtime Meals: If allowance received under award

P

Medical Examination:

Only if from the referral of a work-related business licence

P

Newspapers:

Claims may be allowed in limited cases if the publication is directly related to income-producing activities.

O

Overtime Meal Expenses:

Only if award overtime meal allowance received.

P

Parking Fees and Tolls:

Includes bridge and road tolls (but not fines) paid while travelling for work-related purposes.

P

Photographs (performing arts):

 

• Cost of maintaining portfolio

P

• Cost of preparing portfolio

O

Practising Certificate:

Applies to professional employees.

P

Prepaid Expenses:

Non-business individuals and SBE taxpayers claim is fully deductible if services are to be performed in period not exceeding 12 months. All other taxpayers must apportion claim over the period of service

P

Professional Association Fees

P

Professional Library (books, CDs, videos etc): Establishedlibrary(depreciationallowed)

 

• New books: Full claim if cost $300 or less (includes a set if total cost is $300 or less).

P

• New books: Depreciation if cost over $300 (includes a set if total cost is more than $300).

P

Protective Equipment:

Includes harnesses, goggles, safety glasses, breathing masks, helmets, boots. Claims for sunscreens, sunglasses and wet weather gear allowed if used to provide protection from natural environment.

P

Item

 

Removal and Relocation Costs:

If paid by the employer, may be exempt from FBT, but deductible.

O

Repairs:

Income producing property / or work-related equipment.

P

Self-education costs:

Claims for fees, books, travel (see below) and equipment etc. only if allowed if there is a direct connection between the course and the person’s income earning activities. No claim for the first $250 if course is undertaken at school or other educational institution and the course confers a qualification. However, that first $250 can be offset against private expenses, eg. travel, child minding fees, etc

P

Seminars:

Including conference and training courses if sufficiently connected to work activities.

P

Social Functions

O

Stationery:

Diaries, log books etc.

P

Subscriptions:

 

• Publications if a direct connection between publication end income earned by taxpayer.

P

• Professional associations: Maximum of $42 if no longer gaining assessable income from that profession.

P

• Sports clubs

O

Sun Protection:

Claims for sunglasses, hats and sunscreen allowed for taxpayers who work outside (see 12.147).

P

Superannuation Contributions:

Claims allowed in respect of employees. Substantially self-employed persons if their assessable income, reportable fringe benefits plus reportable employer superannuation  contributions is less than 10% of their total assessable income from all sources, reportable fringe benefits plus reportable employer superannuation contributions total.

No deduction is available for interest on borrowed monies used to finance deductible personal superannuation contributions.

P

Tax Agent Fees: (deduction can be claimed in the income year the expense is incurred).

• Travel and accommodation expenses if for travel to a tax agent or other recognised tax adviser to obtain tax advice, have returns prepared, be present at audit or object against an assessment.

• Cost of other incidentals if incurred in having tax return prepared, lodging an objection or appeal or defending an audit.

P

Technical And Professional Publications

P

Telephones and Other Telecommunications Equipment: (Including mobiles, pagers and beepers.) Cost of telephone calls (related to work purposes).

P

• Installation or connection

O

• Rental charges (if ‘on call’ or required to use on regular basis).

P

• Silent telephone number.

O

Tools: (work related only) If cost is $300 or less.

• If cost more than $300, the amount would be depreciable, and the amount deductible equals to the decline in value.

P

Trauma Insurance:

If benefits capital in nature.

O

Travel Expenses: Including public transport, motor vehicles and motor cycles, fares, accommodation, meals and incidentals. Travel between home and work.

O

• Where employee has no usual place of employment (e.g. travelling salesperson).

P

• If ‘on call’.

O

• If actually working before leaving home (e.g. doctor giving instructions over phone from home. Note that this applies in limited circumstances only).

P

• Must transport bulky equipment (e.g. builder with bulky tools)

P

• Travel from home (which is a place of business) to usual place of employment

O

• Travel from home to alternate work place (for work-related purposes) and return to normal work place (or directly home)

P

• Travel between normal work place and alternate place of employment (or place of business) and return (of directly home)

P

• Travel between two work places

P

• Travel in course of employment: See Substantiation rules at 12.210

P

• Travel accompanied by relative (may be allowed if relative is also performing work-related duties)

O

Union and Professional Association Fees

P

Vaccinations

O

Watch:

Unless job specific such as a nurse’s job watch.

O

 

For more information on any of the

above items, please contact your accountant at

Leader Accountancy
Office: Suite 207, 250 McCullough St, sunny bank, QLD 4109
T: 07 3727 8822 | F: 07 3727 8899 | E: jerry@leaderaccountancy.com.au

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