So with the end of the financial year coming up – people start to think about tax. What expenses can I claim?

Claim what you might be entitled to

The basics

You must incur the expense in the course of earning your assessable income that isn’t private, domestic or capital in nature.  And where it is partly private, etc. you can only claim the business %.

What does that mean in ENGLISH!

Basically -just because you buy something for work doesn’t mean you can always claim it. You can’t claim your suit, lunch, clients lunch, speeding fine you got on the way to a customer, etc. 

And you can’t claim entertainment and fines either (pretty hard to get a tax deduction for those).

See more on the ATO website  at:http://www.ato.gov.au/individuals/content.asp?doc=/content/16077.htm&page=2&H2

General Office Job – What you might be able to claim

Here are a few of the main tax deductible expenses that employees might have.

 - Client Calls you make from your mobile/home phone.

 - Taxi/Car travel from work to client (if you have paid – not if you have been reimbursed by your boss).

Car Expenses There are a few different ways to claim car expenses.

Under 5,000km business kms (cents per km or logbook)

Cents Per Kilometre This is the simplest method (and least documentation).

Business kilometres (up to 5,000) x ATO Cents per km  = Tax Deduction.

The ATO Cents per km changes but in the 2009 year a 1.6-2.6 engine you could claim 74c per business kilometre.

So say you did 6,000 business kms you can only claim 5,000kms maximum x ATO rate (say 74c) = $3,700 deduction.

So 5 trips to client x 5kms (x 2 if you went back to work afterwards) x 74c = $37 tax deduction.

Logbook – if you keep a logbook, write out which trips are business at the end you will get a business percentage (e.g. 120 business kms/ 1,200 total kms = 10% logbook percentage). Then you can claim X% of your car expenses like petrol, rego, etc.

But it does gets a bit complicated when you add depreciation and whether the car is on lease or HP.

If you have travelled over 5,000km business kms there are two other methods you can choose to use -12% original cost or 1/3rd actual expenses (but if you use your car mainly for business you might be better off under the logbook).

Doing Work at home

 - Business Percentage of your internet/home phone, etc. cost.

For example you might claim 10% of your internet cost (10% x $50/month x 12 months) as you do some work from home and $80 for home phone calls (you made about 16 interstate long calls which cost about $5 each).

 Things that you might be able to claim if your work hasn’t already paid

 - Travel for a predominately business trip (bad news if you tacked a long holiday on the end).

  - Associations/Union fees (note you can’t claim social club fees)

 - Professional journals/memberships 

See also ATO Miscellaneous work related expenses  http://www.ato.gov.au/individuals/content.asp?doc=/content/18839.htm&pc=001/002/013/008/001&mnu=924&mfp=001/002&st=&cy=1

This entry was posted on Tuesday, June 15th, 2010 at 4:21 am and is filed under Tax. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.