Top Tax Tips for the Top Professions
The end of the financial year is approaching and that can only mean one thing; it’s nearly time to lodge your tax return. Now is a great time to take stock of all the money you’ve spent on work-related items during the course of the year. The question is, are you claiming everything you’re entitled to? The general rule is that if you incur an expense as part of your job and aren’t reimbursed by your employer, you can make a claim. Depending on what you do for a living, that can give rise to some unexpected deductions! Here are some of the things you may not know you can claim (plus a few things you can’t claim) for five of the most popular professions.
Teaching/Education
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Annual teacher registration fees are deductible
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Claim the costs of references books or a professional library for the subject you teach
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Prizes that you purchase to reward the achievements of your students and encourage future performance are claimable
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Stationary, art materials, stopwatches and computer consumables including pens and toner cartridges are all deductible
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Depreciation on technology costing more than $300, like computers, laptops, tablets, mobile phones and printers (items less than $300 may be written off immediately)
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Teacher aids
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Conferences and courses linked to your teaching can be claimed, including associated costs such as travel and textbooks
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If you mark homework or prepare lessons whilst at home, you can claim home office expenses such as a proportion of internet costs and the associated costs of any technology you use such as computers and printers as well as a portion of utility bills.
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If you pay for school excursions, such as sporting or camping trips, out of your own pocket and aren’t reimbursed, the costs are claimable. This can include meals, transport and accommodation costs.
Healthcare (including nursing, as well as physios, audiologists, dentists, doctors, etc.)
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If you’re required to wear a uniform as part of your role, the cost is deductible.
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You can also claim a deduction for the cost of clothing that you use at work to protect your ordinary clothes from soiling or damage, for example, laboratory coats and aprons.
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If you need protective clothing, such as non-slip shoes, they are deductible.
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Claim for conference expenses. As well as the cost of the conference itself, that can also include travel, meals and accommodation costs – even where the conference is overseas, though you might need to apportion the costs (and disallow the private bit) if you spent some downtime on the beach afterwards!
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Claim for professional subscriptions, whether to a professional body like the AMA or to a trade union.
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If you’re required to work overtime, you can claim for the cost of buying meals provided you have been paid an allowance by your employer.
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Agency costs: if you get your work through an agency, the cost is claimable.
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Many health care workers will need to use their own car as part of their job. That can include transporting patients, travelling between patient’s homes or travel from one medical facility to another; all such journeys are potentially claimable.
Business/Corporate
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The cost of a handbag or briefcase is claimable if you need it for work purposes, such as carrying paperwork or a laptop. Be careful though; the ATO may query whether a Gucci handbag is really required as part of your job!
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You can’t claim the cost of “conventional” clothing worn at work. That rules out suits and other business wear unfortunately.
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If you work from home you can claim a deduction for home office expenses. Either claim the ATO’s ‘shortcut’ of 80 cents per hour, the alternative 52 cents per hour (where you can also claim items like your mobile phone use or home internet separately) or claim a proportion of your actual costs, based on a diary of work use.
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If you travel as part of your work, you can claim the costs of your work-related journeys such as the cost of visiting clients or suppliers. If you use your own car, either claim 72 cents per kilometre up to a maximum 5,000 kms or keep a logbook and claim your actual expenses. You can also claim for parking, tolls and public transport if you don’t use your car.
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Sadly, the cost of entertaining clients isn’t tax deductible.
Tradie
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If you run your own business, you can use the temporary full expensing scheme to immediately deduct the cost of capital items for use in your business costing. That include items as diverse as:
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Tools for use in your business
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Other items of plant and equipment.
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Technology such as laptops, desktop computers, phones and tablets
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Motor vehicles
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If you’re employed by someone else, the rules are less generous. You can claim a deduction straight away for tools costing $300 or less but if the cost is more than $300, you’ll need to write off the cost over the life of the tool, which could be several years. Take care if you purchase a set of tools – you can’t claim each tool individually so unless the cost of the set is less than $300, you’re looking at writing off the cost over a few years.
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If required to wear either a compulsory uniform or protective clothing to keep you safe (or to protect the normal clothing you wear underneath), the chances are you’ll be able to claim a tax deduction both for the cost of purchasing the item and the cost of getting it periodically laundered or dry cleaned. Amongst the things you could claim are:
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fire-resistant clothing
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safety-coloured vests
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steel-capped boots
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gloves
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hardhats
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overalls
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non-slip safety shoes
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COVID-19 protection such as masks and face shields
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heavy duty shirts and trousers such as rip proof items of clothing made with heavy duty mesh that are designed to protect you or items with reflective strips
Law
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Don’t forget to claim the cost of your annual practicing certificate
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Whilst normal business attire isn’t claimable, clothing specific to the legal profession, such as the robes and wigs worn in court by barristers, are deductible
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Sadly, you can’t claim the cost of club fees (such as the local golf or tennis club) even if you use your membership as a means of networking and meeting clients
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Your professional indemnity insurance costs are claimable
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You can claim the cost of Supreme Court library fees
Keep records:
Keep records! It doesn’t matter what you’ve spent; if you can’t prove that you spent it, you can’t claim it. So, gather together all those receipts and invoices. If you’ve lost a receipt, try to get a copy from the retailer. If that fails, a bank or credit card statement might do if you can clearly identify the item. Don’t try to claim if you don’t have the paperwork; you’re leaving yourself open to an ATO audit.
Seek expert help
Speak to a tax agent at H&R Block, Australia’s leading provider of tax services. They can identify exactly what you need to do to get into shape for the 2022 tax season and maximise your deductions.
