Recording your deductions

When lodging your tax return its important to have a record of all your work-related expenses and their associated receipts. Keeping good records is essential to allow you to complete your income tax return and to back up all your claims.

Rather than chasing round at the end of the year to locate all your receipts and reconcile your expenses, there is an easy to use app that can help you to keep track of your spending and receipts over the course of the year so that you have all the information you need at tax time.

Records you need to keep

If your work-related deductions are more than $300, you must have records to support your claims. If the total claimed is $300 or less, you need to be able to show how you calculated your claims, but you do not need written evidence.

Records are usually a receipt from the supplier of the goods or services. The receipt must show the:

  • name of supplier
  • amount of expense
  • nature of goods or services
  • date the expense was paid, and
  • date of the document.

MyDeductions is a free record keeping tool developed by the ATO that makes it easier to keep track of your records digitally. You can then email your records directly to your registered tax agent. The tool allows you to record deductions including work-related expenses, gifts and donations, interest and dividends. It also lets you store photos of receipts and record car trips. The MyDeductions tool can be used by individuals and sole traders.

What you can claim?

To claim a deduction for work-related expenses you must have spent the money yourself and not been reimbursed an it must be directly related to earning your income. To claim work-related deductions, you must have records or be able to show how you calculated your claims.

  • Vehicle and travel expenses – This does not normally include the cost of travel between work and home but, if you use your car for work or work in different locations, then you may be able to claim a deduction.
  • Clothing, laundry and dry-cleaning expenses – To legitimately claim the cost of a uniform, it needs be unique and distinctive, for example it contains your employer’s logo, or is specific to your occupation, like chef’s pants or coloured safety vests.
  • Gifts and donations – to organisations that are endorsed by the ATO as deductible gift recipients.
  • Home office expenses – Costs could include your computer, phone or other electronic devices and running costs such as an internet service. You can only claim the proportion of expenses that relate to work, not private use.
  • Interest, dividend and other investment income deductions – Examples include interest, account fees, investing magazines and subscriptions, internet access, depreciation on your computer.
  • Self-education expenses – If the study relates to your current job, you can claim expenses like course fees, student union fees, textbooks, stationery, internet, home office expenses, professional journals and some travel.
  • Tools, equipment and other equipment – If you buy tools or equipment to help earn your income, you can claim a deduction for some or all of the cost. Examples include protective gear, including sunscreen, sunglasses and hats if you work outside, office equipment, safety equipment and technical instruments.
  • Other deductions – Other items you can claim include, union fees, the cost of managing your tax affairs, income protection insurance (if it’s not through super), overtime meals, personal super contributions and other expenses incurred in the course of earning an income.

Australians lose millions in unclaimed tax deductions every year. Don’t let this be you. Keep your work-related expenses recorded and up to date and you can save yourself time and energy come tax time as well as making sure you get all the tax deductions you are entitled to.

Call John Sciacca today for a no-obligation consultation on 07 3357 5553 or email john@sciaccagroup.com.au

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