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What can I claim on my tax return?

Tax time is around the corner. Source: Getty

With the end of financial year just around the corner, so too are tax returns, which you can officially start completing on 1 July.

When you’re lodging your tax return, you’re entitled to claim deductions for expenses - most of which must be directly related to earning your income. But do you know what applies to you?

Yahoo Finance breaks it down.

What work-related expenses can I claim on my tax return?

If you spent money on something you needed for work, and weren’t reimbursed by your employer, you can claim a deduction for it - as long as you have a record (bank statement or receipt) to prove it.

If the expense was for both work and private purposes, the Australian Taxation Office says you can claim a deduction for the work-related portion.

Can I claim vehicle and travel expenses?

You can claim vehicle and other travel expenses you incur “in the course of performing your work duties”.

But, you can’t claim for normal trips between home and work - because that’s considered private travel.

Here’s what is considered as work-related costs of travelling:

  • Directly between two separate workplaces;

  • From your normal workplace to an alternative workplace that isn’t your regular workplace (like a client’s workplace or business meeting);

  • Travel from your home to a workplace if your home was a base of employment.

If you use your own car in performing work-related duties, you can claim a deduction for car expenses - but if the travel was partly private, you can only claim the work-related portion.

If your work requires you to stay somewhere, you can deduct your accommodation costs as well as meals and incidental expenses if:

  • You declare any travel allowance you receive as income on your tax return;

  • You’re required as part of performing your work duties to travel away from home;

  • You’re working away from home for relatively short periods of time;

  • You paid for the accommodation yourself and weren’t reimbursed for the costs you incurred.

Can I claim my dry-cleaning?

Dry-clean away!

You can claim a deduction for the cost of buying and cleaning occupation-specific clothing, like protective clothing (steel-capped boots, gloves, or nurse’s shoes) or unique uniforms.

But, you need to have written evidence that you purchased the clothing and records of your cleaning costs.

You need to keep those records for at least one month if the amount you claimed is over $150, or your total claim for work-related expenses is over $300.

But, if you received an allowance from your employer for clothing, uniforms, laundry or dry-cleaning, you need to declare that allowance on your tax return.

Can I claim my home office?

If you’re an employee who works from home regularly, you could claim a deduction for expenses relating to that work.

If your home is your principal workplace, and you have a dedicated work area (an office or study), you can claim:

  • Running expenses;

  • Work-related phone and internet expenses;

  • Decline in value of a computer (work-related portion);

  • Decline in value of office equipment; and

  • Occupancy expenses.

Running expenses include computers, printers and furniture, as well as heating, cooling, lighting, and cleaning costs.

While calculating all of that might sound daunting, the ATO will allow you to claim a deduction of 52 cents for each hour your work from home.

Occupancy expenses include things like rent, mortgage interest, property insurance, land taxes and rates.

But, if you claim occupancy expenses, you don’t qualify for the capital gains tax main residence exemption for the part of your home that you use for work.

If your home is not your principal workplace, but you still have a dedicated work area, you can claim everything bar occupancy expenses.

And, if you work from home, but you don’t have a dedicated work area, you can claim just work-related phone and internet expenses, a decline in value of a computer and a decline in value of office equipment.

Can I claim self-education expenses?

You could claim a deduction for self-education expenses if it relates to your current work, or if you receive a taxable bonded scholarship.

The ATO says you self-education courses are deductible when the course you do leads to a formal qualification, and:

  • Maintains or improves the specific skills or knowledge you require for your current work;

  • Results in or is likely to result in an increase in income from your current work.

Other surprising things you can claim…

H&R Block’s director of tax communications, Mark Chapman, told Yahoo Finance that the general rule of thumb is, “the more strange or left field your occupation is, the stranger your tax deductions will be”.

So while we now know the basics, I bet you didn’t know some people can make these strange claims:

  • Musical instruments

  • Dogs

  • Garden gnomes

  • Sex toys

Should I spend before the end of financial year?

While most of us will spend up big after the financial year is done, it turns out it’s actually a good time to spend your pennies even before the end of financial year rolls over.

Under the Australian Tax Office’s (ATO) capital allowance system, individuals can claim tax on certain work-related assets, and instantly write them off if they’re valued up to $300 - provided you tick a few boxes.

The deadline for those purchases, and any other work-related expenses, is 30 June.

Take a look at some of the things you can buy here:

  • Sunglasses

  • Sunscreen

  • Outdoor wear

  • Protective gear

  • Diary/Calculator

  • Make-up

  • Bags and briefcases

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