Work expenses: Tax deductions you can claim in 2016

GOOD news! There are plenty of things you probably don’t even realise you can claim as work expenses. Sorry, but there’s also a big catch.

Knowing what you can and can’t claim can be confusing.

WHEN it comes to work expenses, claim to your heart’s content.

But make sure it’s legit and you have a receipt to back it up otherwise you could be faced with a hefty payout to the taxman.

And while there are plenty of things you probably don’t even realise you can claim, there’s a big catch.

ATO Assistant Commissioner Graham Whyte said people should claim everything they are entitled to but no more or no less.

Mr Whyte said the rules around what people could claim were confusing but there were clear guidelines available to help people understand them.

“Generally speaking, if you claim a deduction you need to remember the three golden rules,” he said.

“One, make sure you spent the money yourself and were not reimbursed. Two, make sure it’s related to your job and three, you need a record to prove it.”

The good news is there is certainly plenty of things you can claim if you play your cards right according to tax expert Dr Adrian Raftery.

The senior Lecturer in Financial Planning and Superannuation at Deakin University said the important thing is that is taxpayers have to be able to prove they directly relate to their job.

Here are some of the work expenses you can claim that you might not know about.

ELECTRICITY

According to Dr Raftery this is a big bonus especially for those who work from home.

With taxpayers able to claim 45c per hour of work, that’s a huge saving at the end of the week.

“Keep a log book,” he said.

“If you work 40 hours a week on average that works out to be more than $900 (a year).

“That’s a genuine deduction you can legitimately claim.”

Work out the sums and a deduction on your electricity bill is a decent deduction.

INCOME PROTECTION INSURANCE

A lot of us pay this in the event we are covered against illness or injury.

But according to Dr Raftery many people might not realise they can claim it as a tax deduction.

“This is definitely claimable, but only if it is paid in your name and separate to your super,” he said.

In other words people who pay it through their super fund and not as a separate expense cannot claim it as tax.

CREDIT CARDS

Claiming a deduction on credit cards is possible, but only if it is a work only card.

Dr Raftery said it was possible to claim things such as the annual fee and certain interest charges.

He said it was also possible to claim some expenses if it directly related to work.

CAR USE

This is one deduction that will be on the radar this year, and the ATO will be checking.

Dr Raftery said there was absolutely no issue with claiming car use so long as people kept a log book.

“This doesn’t have to be exact to the kilometre but rather the tax man wants to see a log book which represents your typical travel,” he said.

So while travelling to and from work doesn’t count as a deduction, using your car to see a client does count.

“But keep a record,” he said.

Yep you can claim your car, but you’ll need a log book.

OFFICE EQUIPMENT

For anyone who works from home, even one day a week this is an easy deduction.

According to Dr Raftery, people can claim office equipment including desks, printer, cartridges and stationery.

“You can also claim computer depreciation,” he said.

“Things like antivirus software count too.”

MOBILE PHONE

The ATO is also cracking down on this deduction so Dr Raftery said it was important to know you shouldn’t claim the whole phone.

“Checking Facebook on the train home isn’t really a work expense,” he said.

He said it was unrealistic for people to think their entire phone could be written off and they would be hard pushed proving to the tax man that that was the case.

Claiming your phone is more than fine, but don’t claim the whole lot. Picture: iStock

CLOTHES/MAKE UP

While the tax man wouldn’t look too kindly on a new outfit being claimed as a tax deduction, you can claim certain items if they are a necessity.

For example you might be able to claim a handbag or briefcase if you can prove it carries more than lipstick and lunch to the office.

For a full list of what you can and can’t claim, check out the ATO’s list here.