While everyone eagerly awaits that injection of cash at tax time, no one looks forward to actually doing their taxes. After all, the headache of searching for all of your lost receipts while trying to figure out what you can and can’t claim all seems pretty daunting. Luckily for us, finance superstar Mel Browne made it all seem so simple in our Masterclass Online on “How To Get Your Best Tax Return Yet”. Here are six things we learned about what you can and can’t claim on your tax return:
The common misconception about claiming your mobile phone on your tax return is that if you don’t make business calls, you have no claim. That’s totally not the case anymore. Mobiles are way more than just a device for calling these days – there’s email applications, calendars, calculators, cameras, stopwatches, the list is endless.
Of course, you can’t claim your entire phone bill but you can definitely claim a percentage of it on your tax return. You can figure out this percentage by monitoring how you use your mobile phone for a month, taking note of how much you use it for work and how much you use it for personal. This also goes for phone accessories like phone covers and earphones!
Now obviously you can’t claim that tiny little bag you bought that only fits your phone and credit card, but you can claim something bigger and more practical. If you’ve specifically bought a handbag to carry your laptop, documents and all other work goodies, then you can claim your bag back on tax.
It doesn’t necessarily need to just be a handbag either, satchels and backpacks you’ve purchased for work count too. But remember that just because you can doesn’t mean you should – buying a designer bag just to claim it on tax really isn’t worth it. Your handbag has to be claimed in one lot, in one deduction and be under $300 otherwise the claim will have to go over a couple of years.
Yep, you read that right. You can technically claim your makeup IF it has sun protection in it and your job has you working outdoors. So that means any products such as moisturisers or foundations with SPF in them are claimable. That is, of course, unless your job requires you to wear makeup like an airline attendant or performing artist.
Unfortunately that means if you work in an office all day, you don’t really qualify to claim your makeup unless you’re running around the city for meetings all day. But if you’re a sales representative going door to door or a teacher who is often on the playground in the sun, go for that makeup claim!
Rent and utilities
When it comes to rent, if you have a dedicated home office because your company doesn’t have an office, you can claim part of your rent, light and heat and internet. The rent percentage you can claim is determined by the square meter size of the office, so there is a little bit of calculation involved if you want to make that claim!
On the other hand, if you work from home and keep track of the hours, you’ll likely be able to claim light and heat expenses for them. While the rate is only $0.45 an hour, it really does add up if you find yourself working out of home often enough. The same goes for your internet – if you divide your internet cost by the number of people in the home and split that percentage by how much is personal and professional, you’ll have a claimable percentage.
Repairs to your rental property
Similarly, if you rent out your property on AirBnB or to tenants, you can claim any necessary repairs on the home. But this claim is a little tricky because you have to make sure that your repairs are technically repairs and not improvements.
Having to fix a hole in the wall that a rowdy AirBnB renter caused is a repair but an entire kitchen remodel because of one broken cupboard handle is a remodel to improve the property. This year the ATO are cracking down on rental property claims so make sure you chat to an accountant to ensure you’re not mistaken in the claims you make.
If you take a course with the purpose of up-skilling for your current job, you can definitely claim that course on your tax return. However, if it’s just a general course you’ve decided to take then that’s a personal expense. If you’re unsure of the difference, try speaking to your employer and ask them for a letter that justifies why you’re doing it.
Anyway, if the course is beneficial to your job and will help you become a better worker, there’s a chance your employer can help you cover it. If the course is a genuine claim, you should be able to claim course fees, the light and heat used at home studying, relevant books and resources, and the internet costs. Plus if the course is overseas you can likely also claim the relevant accommodation, airfare and food costs you incur.
DISCLAIMER: This webinar represents general information only. Before making any financial or investment decisions, we recommend you consult a financial planner or accountant to take into account your personal investment objectives, taxation, financial situation and individual needs.
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Melissa Browne is a Powerplayer, and CEO of accounting firm A&TA and financial planning firm The Money Barre and author of Unf*ck Your Finances. To connect with Mel Browne, reach out here.