Income Tax Deductible: Work-Related Expenses
There are various expenses that are allowed as deductions in the Individual tax return.
The most common are work-related expenses.
Work-related expenses are the first five items under deductions in the Individual tax return form.
Below are the following work-related expenses and their labels:
- car expenses (D1)
- Travel expenses (D2)
- Clothing, laundry, and dry cleaning expenses (D3)
- Self-education expenses (D4) and
- Other expenses (D5)
Work-related Car Expenses:
If you use your own car (can be your own, or lease or hire) for work purposes, you can claim a deduction either by using the cents per kilometer or the logbook method.
You can only claim this deduction if you use your car to:
- complete your work duties
- attend work-related conferences or meetings away from your normal workplace
- travel between two distinct places of employment and that none of these places is your home
- travel from a regular workplace to an alternative one and back
- travel from your home to an alternative workplace and then to your regular workplace.
Work-related Travel Expenses:
These are transport expenses including the cost of driving your car, train, taxi and bus fares as well as by plane, however, it should be in the course of completing your work duties.
Note that accommodation, meals, and incidental expenses are only deductible if you sleep away from home overnight.
You cannot claim a deduction if your travel expenses are being reimbursed (e.g. by your employer).
Work-related Clothing, Laundry and Dry Cleaning:
These do not include conventional clothing or clothing you normally wear every day.
You can only claim the cost of buying, hiring, repairing, or cleaning clothing if it falls under one of these categories:
- compulsory uniforms
- non-compulsory uniforms
You can’t claim these expenses if it is reimbursed by your employer.
Work-related Self-Education Expenses:
Self-education expenses are deductible when the course you undertake is a direct connection to your current job and:
- maintain or improve the knowledge or skills required in your current job, or
- it is likely to lead you to an increase in income in respect of your current income-earning activities
A deduction will not be allowed for a course that:
- relates only in a general way to your current employment or profession
- enables you to get a new job or open up a new business opportunity
Other Work-related Expenses:
These are deductible expenses that have not been claimed elsewhere in the tax return (e.g. Subscriptions and union fees, etc.).
Would you like to know more about all types of deductions? Reach us now.
Yan (Jenny) Qi CA
Founder of Progress CA Pty Ltd
Tel. no. 0403 050 779