What Tax Deductions can I Claim?
The answer to one of the most frequent questions we get asked every year has been summarised by the Australian Taxation Office (ATO) into the 3 Golden Rules for deductible expenses.
- You must have spent the money yourself , ie, paid for the expense, and weren’t reimbursed
- It must directly relate to earning your income
- You must have a record to prove it.
Whilst rule 1 and 3 are relatively clear cut, rule 2 can be tricky, for example, requirement to wear a white shirt and black pants as wait staff does not make the purchasing of “normal” clothing deductible. It has to be a business specific uniform where the clothing is designed and made only for the employer. It must have the employer’s logo permanently attached and not be available to the public.
Specific industries also have special rules for them written in the Tax Act so if you are looking to make a claim for work related expenses, make sure they comply with the “3 golden rules”. Incorrectly claiming expenses can result in penalties being applied by the ATO together with an interest charge for the tax shortfall.
If you are not sure at all then it is best to seek professional help and call Seeton Consulting for a free initial consult on 08 94745155 or email at info@seeton.com.au