Tax returns: Most unusual deductions Aussies can claim

Accountants have revealed some of the secret claims that have been attempted and rejected – and the more obscure ones that have worked.

Dogs, garden gnomes and dance lessons are some of the more unusual claims that Aussie taxpayers have made.

Depending on your area of employment, there are a range of tax deductions that could be available.

The basic rule is that if you’ve incurred an expense as part of your job, you can claim it.

For instance, if you’re a taxi driver, you can claim fuel for your car, while if you’re a tradie, you can likely claim a deduction for an array of essential tools.

Mark Chapman, director of tax communications at H&R Block, asked the company’s network of tax consultants for some of the more outlandish claims taxpayers have tried to make over the years, including what has succeeded and what has failed.

“Bearing in mind that we deal with over 750,000 Australians a year, it’s fair to say we’ve seen our fair share of strange claims,” he told news.com.au.

From clowns to dogs to suits, here’s a rundown on what people can and can’t get away with.

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Some people have tried to claim their dogs as a tax deduction. Picture: Supplied

The family dog?

Turns out in limited circumstances you can actually claim the costs of purchasing a dog and keeping it, such as for food and pet bills.

“The two most common scenarios where the cost of a dog is tax deductible are farming, where an animal might be used to round up sheep, for instance, and security, where the cost of a guard dog to patrol business premises might be allowable,” Mr Chapman said. “Other than that, forget it.”

So for the client who “occasionally” took his dog to work to guard his tools and equipment and on that basis tried to claim for the dog’s food, there wasn’t much success, he said.

“How he guarded his tools and equipment on the days he didn’t take his dog to work, we never found out,” Mr Chapman said.

Suits

Mr Chapman was told a story about a high-profile television personality, who every time he graced the screens would wear a new suit and then give it away to a charity shop.

“Not only did he want to claim a tax deduction for the cost of each new suit, which he claimed he was obliged to wear to maintain his personal brand, he also wanted to claim a further tax deduction for the donation to charity,” Mr Chapman said.

“Sadly for him, the ATO doesn’t allow deductions for the cost of conventional clothing, a category that includes business suits, even those purchased by TV stars.”

As for the donations, he didn’t have receipts from the charity, so there was no possibility for a deduction either.

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One profession can claim certain toys. Picture: iStock

Cosmetic enhancement

Still with the rich and famous, a well-known fashion model had undertaken various cosmetic procedures to maintain her appearance.

She argued that the work done was to maintain her career past the point that it would otherwise have faded out if she hadn’t had the work done, Mr Chapman said.

“As such, she argued there was a clear link between the cosmetic surgery and deriving her income,” he said.

“It’s an argument that seems superficially compelling but it’s not one the ATO would agree with; so far as they are concerned, medical procedures are rarely if ever tax deductible, no matter what the reason.”

Breast enhancements might be a tax no-go, but adult performers can look at successfully making claims for items as diverse as dance lessons, hair care, oils, lingerie, costumes and sex toys.

If you want to work on your rental property’s street appeal, a garden gnome could be claimed. Picture: iStock

Garden gnomes

Property owners rejoice – if you rent out your place among the usual deductions like mortgage interest, rates and repairs, you can also claim for items that improve your property’s street appeal.

“Whether you think garden gnomes do that or not is really a matter of personal taste but several clients have successfully claimed them in respect of their rental property,” Mr Chapman said.

“Here’s a tip – make sure the gnomes are actually for your rental property; if they turn up in the garden of your family home, they are not deductible.”

Some costumes can be claimed. Picture: iStock

Costumes and props

Another profession that can generate some very strange tax deductions is circus performers, said Mr Chapman.

“Not many people can successfully make a claim for a clown costume, but one client who did was a professional clown,” he said.

“The whole costume was allowable, including the red nose, as a work-related clothing claim. Similarly, the professional sword swallower was able to claim the ceremonial swords used in his act.”