It’s a commonly acknowledged fact that no one actually LIKES doing their taxes.
But if you do them right, you can be rewarded with a nice big return and I think we can all agree that that is something we all like.
We got a few pointers on how you can maximise your return from the director of tax communications at H&R Block, Mark Chapman.
Chapman said that costs which you incur in traveling for work are generally tax deductible.
“The law in this area is very complex, though, and with the ATO regularly keeping a close eye on people making incorrect travel claims, it pays to take care to get it right.”
Here are Champan’s top tips for the travel industry come tax time.
If you incur a cost which isn’t reimbursed by your employer, there are lots of other items you can claim. Remember all these must be work-related and mustn’t be connected to your journey from home to work:
- Bridge/tunnel tolls
- Public transport fares
- Car parking
- Taxi fares
You can’t claim the cost of fines for speeding, parking infringements or other motoring offences.
Overnight meals and accommodation
If you’re required to travel away from home overnight for work purposes, on an interstate trip perhaps, you can claim a deduction for any meals, accommodation or incidental expenses which you incur, if you are not reimbursed by your employer.
Some people who travel extensively are paid an allowance by their employer to cover those costs. Those allowances are taxable but a deduction can then be claimed for costs incurred.
Provided you’ve received an allowance from your employer and you’ve claimed less than the amounts specified by the ATO, you don’t need to keep detailed records such as invoices and receipts. If you spend more than the ATO reasonable amounts (or you don’t get paid an allowance), you must keep detailed records.
This is an area that trips up many people with the ATO, who extensively audit these claims. Some people assume they can automatically claim the reasonable amounts specified by the ATO. That is not how it works. You can claim the amount you actually spent; the ATO reasonable amounts only dictate whether or not you need to keep detailed records.
Even if you haven’t kept detailed records (and aren’t obliged to keep them because of the exemption), you still need to be able to prove that you incurred the expense. That could involve keeping credit card statements or being able to prove that you were in a particular place at a particular time.
In what other situations can I claim travel deductions?
As well as work-related travel, you might also be able to claim travel (using the same rules outline above) in these situations:
- When you attend a work related course or conference. If the conference is local, you can claim mileage or transport costs. If the course is interstate (or overseas), you can claim airfares, accommodation and meals
- Visiting a tax agent. When you get your tax return done (or visit your agent for tax advice), the fee you pay is tax deductible and in addition, you can claim any related travel expenses.
A deduction is allowable for the cost of purchasing luggage to the extent of the work-related use of the luggage. This includes:
- Travel bags
- overnight bags
- suit packs
- navigation bags
- luggage trolleys
You can’t claim a deduction for hairdressing, cosmetics, nail polish, hair and skin care products, even though you may be paid an allowance for grooming and be expected to be well groomed. All grooming products are private expenses.
Flight attendants, cabin crew and pilots whose working conditions in an aircraft are considered to be harsh or abnormal, can claim a deduction for the cost of rehydrating moisturisers and rehydrating hair conditioners used to combat the abnormal drying of skin and hair when working in the pressurised environment of an aircraft, where it is of critical importance to your employer that you maintain a well-groomed and well-presented image.
Only the work-related portion of the amount spent on such items for work purposes is deductible.
Clothing, laundry and dry-cleaning expenses
Claim a work-related deduction for the costs you incur when you buy, rent, repair or clean your work clothing, including:
- Compulsory uniforms or corporate wardrobes – this can be a set of clothing or a single item that identifies you as an employee of an organisation having a strictly enforced policy that make sit compulsory for you to wear the uniform while at work, including for example stockings and court shoes worn by an airline stewardess
- A non-compulsory corporate uniform that your employer has registered with AusIndustry – check with your employer if you are not sure. If you wear a non-compulsory uniform, you can’t claim for stockings, hosiery, socks or shoes as these items can’t be registered as part of a non-compulsory uniform
- A single item of distinctive clothing such as a jumper, shirt or tie with the employer’s logo if it is compulsory for you to wear it
- Protective clothing and footwear to protect you from the risk of illness or injury, or to prevent damage to your ordinary clothes, caused by your work or work environment. Items may include fire-resistant and sun-protection clothing and safety coloured vests.