When completing your tax return, you are entitled to claim deductions for some expenses, most of which are directly related to earning your income.
For you to be able to claim a work-related expense you need to show that:
- you have spent the money yourself and you did not receive a reimbursement;
- the expense was directly related to earning your income; and
- you have records to prove it.
If the expense is for work and private use, you can only claim a deduction for the work-related portion. You cannot claim a deduction for an expense that was reimbursed by your employer.
Some expenses you may be entitled to claim as a tax deduction are:
- Motor vehicle and travel expenses
- Clothing and laundry
- Gifts and donations
- Home office expenses
- Interest and dividend deductions
- Self-education expenses
- Tools and equipment
- Telephone and internet
- Seminars and conferences
- Union fees and subscriptions
You are not automatically entitled to claim standard deductions. You need to be able to show how you worked out your claims, so you need to keep records when incurring expenses or be able to provide evidence on how the claim was calculated. If the total claimed for your work-related expenses is over $300 you must have written evidence to prove your claims. Written evidence can be in the form of an invoice, receipt, credit card statement or other document which shows you incurred the expense.
The Australian Taxation Office reserves the right to review the tax return information for up to five (5) years from the date your tax return is lodged. It is therefore important that all supporting records and schedules are kept for this period.