September 17, 2020
You may not be aware, but there's actually quite a few things you can claim on your tax when it comes to work related expenses – some older, and some new for 2020 in the wake of coronavirus.
We've already looked at what you can claim on your tax return for 2019-2020, but in this post, we'll be looking more closely at expenses you can claim in regards to your work arrangements. From car expenses to clothing and hours spent working at home, knowing what work relate expenses you can claim is important, as it can affect your overall refund.
Here's what you can claim, and how much you can claim, when it comes to work expenses.
If you plan to make a claim related to work, it's best to always have a record of some sort. For example, if you're a tradesman and you purchased power tools for use at work, you'll want to keep a hold of any receipts for proof of purchase. Digital receipts are a great idea in this circumstance, since you'll have a copy of your receipt on file that won't fade or get lost. You should also consider making copies of receipts and keeping them on file.
The story is similar if you are using the new shortcut method for working from home claims due to the effects of COVID-19. Using this method, you can claim up to 80 cents per hour worked from home during a specified window of time during the year. Ideally, you'll want to keep track of these hours in a diary, spreadsheet, or similar document that outlines hours worked.
Another handy hint is to work with financial experts or accountants. While you'll need to pay to use their services, an accountant will know exactly what can and cannot be claimed as a work expense, as well as how much you can claim.
There are numerous expenses that can be claimed on tax, but below are some of the most popular.
These vehicle and travel expenses incurred when you travel for work duties. These expenses can include travel between home and work and between workplaces, accommodation expenses when travelling and working away from home, car expenses such as fuel, expenses from bridges and toll roads and air, bus or train fares.
These are some of the better-known work related expenses you can claim, allowing you to claim a deduction for the cost of buying and cleaning occupation-specific clothing. This covers distinctive pieces of clothing worn during work, such as the checked pants a chef wears. Protective clothing, such as fire-resistant and sun-protective clothing, can also be deducted, as can compulsory uniforms, whilst cleaning and dry-cleaning can be deducted beyond a certain amount spent.
Home office expenses are additional running expenses such as electricity, phone and internet access. If you are working from home as a result of COVID-19, you can also claim 80 cents between March 1st 2020 and September 31st 2020 (shortcut method), or use the actual cost method to get a more accurate deduction.
If you've up-skilled this financial year, you can claim a deduction as a form of work related expense. Self-education may have been undertaken to maintain or improve specific skills or knowledge you require in your current line of work, and can also include any education that resulted in (or will likely result in) an increase in your income from your current work activities.
Everything from power tools to calculators to desks can be claimed as a work related expense (be sure to check the ATO website to make sure!), but it's important that you are able to prove that the item was purchased and used for your work's activities. For example, if you purchase a satchel for your work laptop, that satchel cannot also be used to carry your personal laptop.
How much you can claim sometimes depends on how much you can prove you have spent for work. Thankfully, you can claim deductions on work related expenses both with and without a receipt (although keeping the receipt is always preferable).
Without a receipt, you can generally claim up to $300 per financial year, but chances are you can claim more. This can boost your tax refund considerably, but it's your word against the ATO's, and if you make a substantial claim without proof your deductions may be denied. And, of course, the expenses must be allowable, meaning that they were directly related to your occupation, you paid for it yourself, and you were not reimbursed or paid back by your employer. If you don't have a receipt for a certain expense, bank or credit card statements can also be accepted.
We hope these tips add up to a bigger tax refund for you this year! For more information on your 2019-2020 tax claim, check out our informative blog post. Or, if you still need some financial help after tax, call Sunshine Loans today or apply online for a small loan of up to $2,000.