Getting it Right at Tax Return Time

With flexible working patterns becoming the norm thanks to better internet access and a desire to commute less, more and more people are working from home.

But with work-related tax deductions high on the ATO's tax return audit agenda this year make sure you understand exactly what you can and cannot claim.

When is a Home Office not a Home Office?

You don't need a home office to get deductions for home office expenses. If you are required by your employer to spend a lot of time checking and responding to work emails on your personal laptop or you need to regularly take work-related calls on your personal mobile you could claim part of the cost of those devices as a deductible expense based on the proportion of time you spend using them for work.

But you need to keep records and receipts, and your home office can't just be for convenience. It might not be worth it if the time spent using your own devices is minimal but keep track in a diary or notebook for at least a month, you might be surprised at how the time adds up.

Work-related expenses such as computer repair costs, interest on a personal loan to buy the computer, or the decline in value (depreciation) of the computer over time are also potentially deductible.

If you do have a home office and it's not just a place to escape from the kids for a few hours then you could be entitled to a deduction for some of the running costs including heating, cooling and lighting as well and any repairs and cleaning.

Other work related tools and equipment taking the total up to a value of $300 are also immediately deductible for tax.

It Pays to Learn

If you decided to increase your promotion prospects or just get a little better at your job on your own time, the costs for taking a course are also potentially deductible for tax. But make sure the organisation you study with is a recognised place of education and the course is directly relevant to the work you currently do.

Fees, study materials, travel and any study-related home office costs are all eligible as are any accommodation and meal costs if the course requirements mean you need to be away from home.

But you don't need to commit to a course of study to get a tax break for self education. The costs of attending work-related conferences, seminars and education workshops are also deductible.

And if pick you up the bill for subscriptions to work-related journals or publications then the cost is potentially deductible for tax as long as it's relevant to the work you currently do. As are any union fees and subscriptions to trade or professional associations.

But just make sure it's you who paid the bill and not your employer. Double dipping is high on the ATOs tax return audit agenda this year.

Planes, Trains and Automobiles

The cost of travelling between work and home is generally not deductible for tax unless you are specifically required for example to transport bulky tools and equipment. Out of the ordinary costs can be, so if you're an itinerant worker travelling between two jobs the travel costs are potentially deductible, or if your home is a base of employment then travel from home to an employer to carry on the same job is potentially deductible.

So it's worth thinking about exactly how you structure any work-from-home arrangements you have with your employer to take advantage of that. As usual accurate record keeping is the key.

And if you use your own car for any of those journeys you can use a one of number of different calculations to work out the deductible car expense, including a reasonable estimate for cents per kilometre or keeping a logbook. In every case written evidence is required.

Knowledge Pays the Best Interest

Being aware of expenses you incur personally in the direct performance of your job is a good way of maximising the benefit for your tax return provided you can substantiate those expenses.

But there's a whole lot more to think about at tax time, including expenses related to interest and investments, personal superannuation contributions, and charitable donations.

And simply getting your tax return in by the 31 October due date unless you use a tax agent will avoid potential penalties and make sure any refund owed is earning interest in your bank account sooner.

Wilson Teis have the skills and expertise to help you with all work-related aspects of your tax return. Wilson Teis is about people, we're trusted locally to provide real-world advice and expertise. Call today for a chat about how we can help you get the best outcome from your tax return.