Many office workers in Australia do not realize that they can easily claim a variety of tax deductions every year. These tax deductions for office workers are not new; however, there are some requirements you need to meet before accessing them.
There are many common tax deductions for office workers that people are not taking advantage of. We have created this guide to outline which tax deductions you can access as an office worker and when you can do so.
What Deductions Can Office Workers Claim and What Can’t They Claim?
As an office worker, you have access to a wide range of deductions. For example, you can claim internet and phone expenses for anything related to your work. Self-education costs are also deductible, including seminars, training, and any courses you take, relating to your work.
You can also claim any travel expenses, like meals and accommodation if you need to stay overnight and cover your expenses. If you work from home, there are some tax deductions for office workers you can claim. You can claim for expenses such as cooling, heating, home office equipment, and repairs.
What Expenses Can’t Office Workers Claim as Tax Deductions?
Office clothing is not claimable even if you wear a specific outfit to work. You cannot claim for entertainment expenses like concerts, sports events, or even a business dinner. Your laptop or employer-provided equipment cannot be claimed as a deduction either.
What Receipts or Records Should Office Workers Keep?
Ideally, you want to keep a receipt for anything you purchase that could be tax deductible. If you purchase office ergonomic equipment such as a sit-stand desk, a monitor riser, or an ergonomic chair, then you should retain the receipt. If the equipment was under $300, and you use it more than half of the time for work, that is a tax deduction for office workers you can benefit from.
Additionally, if you work from home, you should keep receipts for all payments that relate to your work. Such payments can include electricity, lighting, consumables, stationery, and the like. You can claim 67 cents per hour on such expenses, on the time you spend working from home. If you have a subscription to a magazine or a journal that helps you with your work, that subscription cost can also be deducted from your taxes.
If you have a personal phone that you use for work, you can claim a percentage of the phone costs. It is even possible to deduct expenses related to union and professional association fees, provided they are work-related.
Restrictions to Tax-Deductible Items
What is important to keep in mind, is that if you have a home office, some of the common tax deductions for office workers will be restricted. You cannot claim insurance, rent, mortgage interest, or rates cost as a deduction.
Similarly, you cannot claim for professional development expenses or anything along those lines. Some people choose to study to be eligible for a new job, but they also want to claim those educational costs as a tax deduction. If the course you are studying is only generally related to your current workplace or does not relate at all, you cannot use the cost as a tax deduction.
Can You Keep a Digital Copy of Your Receipts?
You always want to have a physical copy of the receipts, when possible. However, digital copies are also accepted, either in the form of an email receipt or even as a photo of the receipt as well. There are a few things that need to be shown on the receipt, including the supplier’s name, expense amount, document date and when the expense was paid, and the service/product name.
You do not need to keep receipts related to expenses under $10. However, if these expenses add up to over $200 in total you do need to retain your receipts. In situations when receipts are very hard to get, you should make a note of the receipt in your records and share all the necessary details when required. Again, it is ideal to have a physical or a digital copy, but if you can have a record of all the document’s details, that is also acceptable.
You cannot claim any deduction amount; there are certain limits for all deductions to maintain fairness. Keep in mind that you always need to have a record of the expenses, like an invoice or receipt. That way, you can prove you are eligible for that tax deduction claim. Without proof, you will not be able to substantiate your claim.
Is It Possible to Deduct Travel-related Expenses?
The short answer is yes, but these need to be specific to your type of work. For example, private car use can be deducted, but only when it relates to things like travelling for business purposes. Plane flights, taxi car fares train fares, and even bus fares can be deducted when used for work-related purposes.
These are common tax deductions for office workers, but there can be times when they are not considered. The nature of your office work will dictate how such deductions are perceived and whether you can claim them. That is why it is advisable to hire a tax professional to help with your specific situation.
Lesser-Known Tax Deductions for Office Workers
It is important to note that when you donate to a charity, you can deduct those costs from your taxes. However, it is a very good idea to keep the necessary paperwork since you need proof that you donated to a specific charity.
The same thing can be said about the income protection premiums you are paying outside of Super. These can be deducted, although a lot of people do not realize that. Even the tax agent fees you paid last year to prepare your taxes can be deducted. There is a huge range of different deductions that many people do not know about, and you can save quite a bit of money if you do your research.
Tax Return Tips for Office Workers
Here are four top tips for office workers completing their tax returns:
Tip #1. Work With a Tax Professional
As an office worker, you should always have a good understanding of what can be deducted and what expenses are not deductible. There are also some grey areas, so it is useful to work with a tax professional. That way, you can identify exactly what you can deduct from your taxes and what is not allowed. However, there are a few additional general tips and ideas to take into consideration.
Tip #2. Keep a Record of Your Receipts
It is very important to keep a record of all your receipts, no matter the situation. Without proof, you cannot substantiate your claim and any deductions. That is why you should always have a record of every receipt, be it in the form of a photo, physical or digital document.
Log every trip and expense if you can. Of course, you need to log anything related to your work, including car trips or even work-from-home hours.
Tip #3. Do Not Claim for Expenses You Have Been Reimbursed for
You might want to try to claim some deductions even if you were reimbursed for that purchase/expense. However, you cannot claim expenses you have already been paid for. Make sure that any claim you try to make has not been paid for in any way. Otherwise, it will not be considered, and you will need to pay taxes.
If you try to inflate your deductions, the Australian Tax Office (ATO) will identify that, and you might face a variety of penalties. That is why it is imperative to always support any tax deduction claims with the right paperwork. If not, you will be dealing with a multitude of challenges.
Tip #4. Remain Proactive and Well-Organized
Always stay proactive and well-organized, regarding your expenses and claims. When you try to file your taxes and claim deductions, it is crucial to know where every supporting document is located. Otherwise, when you want to claim certain tax deductions, you will not be able to find the necessary paperwork. So, it is a very good idea to always stay on top of all your expenses and manage your paperwork accordingly.
There are a multitude of tax deductions for office workers, but also plenty of misunderstandings regarding what deductions you can claim and under what circumstances.
It is important to make sure that you understand the common tax deductions for office workers and take advantage of them appropriately. Not only will this process help you save money, but it will also encourage you to organize your paperwork and stay up to date with your tax returns.