July 13 2020
The 2019 / 2020 financial year is now over and what a year it’s been. After a difficult financial year it is very important to know where you stand when it comes to deductions to ensure that you don’t put yourself in an unwanted position.
We want to make it as easy as possible to have a clear understanding of some of the main deductions available and some tips for how to make sure you are claiming the correct amount. After looking through the ATO website we have established some helpful tips for you to help simplify tax time!
Car Expenses
If you use your own car for work purposes, you can claim a deduction using either the cents per kilometre method or logbook method. To be eligible for these deductions you must be using your car to travel to work meetings, events or performing work related duties. It is important to know that travelling from your home to work is not included as a work related expense. All travel must outside of the daily commute.
Work Clothing
Have you heard that you can claim clothing? Not all clothing can be claimed as a deduction, only specific clothing can be claimed so you need to be sure they fall into those specific categories. You can claim a deduction for the cost of buying and cleaning clothing if they are
- occupation-specific clothing
- protective clothing and unique
- distinctive uniforms (Eg. branded clothing)
An easy way to understand this deduction is: “You can claim a deduction for occupation-specific clothing. This means it is specific to your occupation, is not everyday in nature and allows the public to easily recognise your occupation.” ATO
Working from Home
We understand that due to COVID-19 your working arrangements may have changed like many other Australians, resulting in a period where you worked from home. As a result you may have expenses associated with the new normal that you may be able to claim at tax time.
Tracking these expenses can be challenging, so from 1 March to 30 June 2020, the ATO has introduced a temporary shortcut method. It’s a simple way to calculate these expenses with minimal record keeping requirements. Click here to find out more about the shortcut method and additional methods.
Gifts & Donations
You can claim a deduction for a donation you make to an organisation if the donation meets four conditions:
- you make it to a deductible gift recipient (DGR)
- it must truly be a donation. A donation is a voluntary transfer of money or property where you receive no material benefit or advantage
- it must be money or property, which includes financial assets such as shares
- you have a record of the donation such as a receipt.
Up-skilling and Personal Education
Did you put some of your extra time to use during isolation to upskill yourself in anyway? Self-education expenses are deductible when the course you take is related to your current role or maintains/improves your specific skills and knowledge required for your day-to-day job.
- Additionally it can be claimed if it or is likely to result in an increase in your income from your current employer.
Travel Expenses
Although travel expenses may have dropped off over the last few months it is important to understand the rules in place, especially for any trips before the outbreak of Covid-19.
- Transport expenses are deductible when you travel to perform your role/ duties
- This includes the cost of driving your car, flying, catching a train, taxi or bus.
- Accommodation, meals and incidental expenses are deductible when you travel to perform your duties if you are required to stay overnight.
Some Final Tips:
Bank details don’t update themselves
- Make sure the ATO has the correct bank details for your return. If you have changed your banking information, they don’t update themselves.
Lodging earlier doesn’t always mean getting your refund earlier:
- Due to the influx of returns early on, it isn’t always faster to submit your return early. Make sure you complete your return properly to avoid any issues and questions about your submission.
Track all your tax deductible expenses in a single place! Signup to WLTH Finance Tracker today!
