Tax time can come with mixed emotions for people, from an expectation that a refund is coming your way or not through to anxiety around the thought of having to collage paperwork or even perhaps being subject to an audit. Regardless of your approach to tax time, the key focus for people getting ready to lodge their tax return should be preparation. Taking the time to collate receipts, reviewing bank and credit card statements and diarising usage of internet, home office hours or streaming subscriptions for work is important to do well in advance of seeing your accountant. Be vigilant about what you can and can’t claim depending on your job is also very important and it is imperative that you do your own research and listen to your accountant rather than work colleagues or friends that tell you what you should and shouldn’t/can and can’t claim. Each person’s situation is unique and you heighten your risk of ATO scrutiny if you fail to take reasonable care.
For those women wanting to start preparing for tax time and ensure that they both maximise their tax savings whilst avoiding making errors with deductions, the following tips will be very helpful:
- Handbags: the cost to purchase a handbag may be deductible if you use it for work purposes. It needs to be reasonable in that in can fit files, laptop/iPad (i.e. not a clutch)
- Shoes: generally are not deductible however for certain occupations, such as construction or some factory/warehouse employees, the cost to purchase protective and/or non-slip shoes can be allowable
- Make-up/hair: generally not deductible. Deductions are only available for makeup for performing artists or makeup artists for use on clients.
- Gym fees: generally your gym memberships are not deductible unless your job requires you to have a level of fitness greater than the average person such a professional athlete or a defence employee in special forces.
- Moisturisers & skin treatments: generally are not deductible unless you are an airline steward.
- Cosmetic surgery: is not deductible but don’t think people haven’t tried! The ATO had rejected claims for “enhancement surgery” that people have attempted to claim.
- Netflix: a proportion of your Netflix or other streaming services may be deductible of it related to your job. Be mindful to keep diary evidence to determine what percentage is relevant for work purposes.
- Magazines: if the publication is relevant to your job, magazines may be an allowable deduction.
- Clothing: the ATO is quite specific with who can and can’t claim deductions for wardrobe. Clothing can only be claimed if it is protective in nature, occupation specific (ie chef outfit, nurse uniform) or forms part of a corporate uniform. Business attire is generally not deductible neither is casual clothing.
- Work from Home: the ATO is allowing a deduction of 80 cents per hour for the 2021 financial year. This will be a great way for all women to gain a tax deduction especially for working Mums who have opted or been forced to work from home through this year.
Please remember that deductions can only be claimed if you incurred the expense. If you have been reimbursed by your employee for the expenses you are not able to claim the deduction.
A great way to plan and make sure you do not lose receipts is to download the ATO from iTunes and use the myDeductions function, it’s easy to use, stores your receipts and it’s free!