Tax Claims on Work Related Items?

Hi,

I haven't had much experience with tax returns in terms of full time work so I'd like some advice for the term/saying "claiming tax back".

I'm working in an architectural firm at the moment and was wondering if I could claim tax back on things such as architecture talks, architecture books, Sketchbooks, Cameras, etc. These items are not REQUIRED for work, but for me they help with professional development. Can I claim tax back on these items and how so? Any formal proof apart from receipts?

Thanks!

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Australian Government - Australian Taxation Office
Australian Government - Australian Taxation Office

Comments

  • +1 vote

    It's pretty easy so don't stress.
    In the tax return, there's a section for education expenses where you include books/courses/etc for professional development.
    For other work related equipment, just estimate the % of time you used each item for work purposes and claim that % of the total cost.
    Write down your reasoning and calculations somewhere in case the ATO asks, preferably in a spreadsheet.
    Scan all your receipts.

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    Also, assuming that you ever use your computer/internet at home for work-related purposes (which if you are an architect I'm pretty sure you would; looking up designs/pics of real-estate etc., composing emails), don't forget to claim a proportion of the cost of your computer (or the depreciation on it), the peripherals (printers/drives etc.), and your internet access.

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      I don't do work outside the office, but I do do some leisure reading, research etc. (yes related to architecture, no not for work)
      Can I still claim?

      • +5 votes

        I suggest that perhaps you are, shall we say "over analysing" the situation a bit, or perhaps being "overly pedantic" about definitions. In reality, the line is blurry. If the stuff you do on the computer relates to architecture, then it's done to keep your knowledge-base in the field current, i.e. so you can be up-to-speed with 'new trends' as they emerge, so that you are familiar with the concepts being discussed at meetings, etc.. And you mention research. That is a good general word to use to define anything you do on your computer that is even vaguely architecture-related. And happily,'research' is a broad term.

        So yes, you can claim a proportion of your home computer and internet expenses as a tax deduction. If for the purposes of your tax-return you estimated that 50% of the time you spent on the net on your home computer is doing architecture-related 'stuff' (research, etc.), then you could claim 50% of over-all expenses (hardware and internet plan costs) as a tax deduction.

        I will finish with a disclaimer: this is not official tax advice/ I am not a certified practicing accountant (CPA). So by all means, run it past one of them before you decide to claim this stuff. But remember not to over-analyse/get caught up in 'minor details'. Remind yourself that in order to do the best job you can at work, you need to (and do) keep your knowledge-base strong and up to date; and this cannot always be done during standard working hours/at the office (due to time-constraints, distractions, deadlines, etc.). Which is why you do some research after hours, at home.

  • +1 vote

    Lots of sound general advice given above. For a deduction to be claimed there must be a "nexus" between earning your taxable income and the expenses you incur. There was once a " necessarily incurred" aspect too though I'm not sure if that is enforced these days.

    Bottom line is keep a record of all your expenses incurred in relation to you work and domestic expenses you use partially for work purposes.

    My very strong suggestion is you ask around at work and see if there is an accounting or tax preparation company used by your colleagues who specialise in doing tax return for architects, as they will know the industry and ATO accepted deductions well. It doesn't have to be a big city based hideously expensive firm either but be prepared to pay a few hundred to get it done properly. It will pay dividends in the long run.

    If you do it yourself you'll never learn the overall skill of doing a full return and almost certainly you'll overlook stuff you can claim, and other aspects of completing a return properly. And yes, I worked for the ATO for 20 years, but not in the income tax area.

  • +1 vote

    Sounds like you do not mind big data. With that, I would suggest you to get a hardcopy of the tax return from newsagent, including the Supplement. Read from front to back, and highlight those that impacts on you. Well, you can do it electronically but I prefer manual, where I can put little sticker or donkey ears. I know someone who reads it and picked-up that he can claim uniform allowance.

    The other thing is as an architect, do you subscribe to any professional membership, and required to maintain your CPD Professional Development points/hours? If yes, you should be able to claim any expenses relating to this.

    • +1 vote

      While I don't suggest reading the tax pack is a waste of time, I think using a tax professional is justified in your case. They will run through a list of items that may apply in your employment, allowing you to confirm any that do.
      For example, you can probably claim a briefcase you purchased for work, or a suit bag you bought just for business trips. The tax pack doesn't have sufficient detail, and doesn't make it very clear and is unlikely to list such examples, more general things like "travel expenses".
      An accountant/tax prep person does this a lot, and knows what will fly and what won't.
      Note also, self education expenses have recently become less attractive with a high threshold and more onerous requirements.
      This means that where previously people might have claimed a portion of their home office expenses (PC, printer etc.) when they were carrying out work related activities that could be optionally classified as work OR learning as 'education', it would be better to classify them as work (e.g. if you are reviewing updated footing loading specifications at home is it self education or work? I would argue it is work unless it was part of an assignment to gain a qualification).

      Oh, and you can't get the paper return form at newsagents anymore, you need to order it from the ATO.

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