Is The Flight Included in The AmEx Velocity Platinum Card Tax Deductible?

Hi All,

Part of my role involves moving between Sydney and Melbourne offices every now and then.

I know that I claim a tax deduction on flights for work purposes; however, if I bought a ticket using the flight provided by the Amex Velocity card - does that constitute a claimable item if I use that flight to move between the sydney and melbourne offices for work?

I was thinking that at least a portion of the $375 annual fee could be deductible for this purpose.

Just getting some thoughts from you all if I should even bother speaking to an accountant in the first place.

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Comments

  • +4 votes

    Nope. There is no value in the flight. You pay 375 and the flight is included. There is no breakdown.

    However, you can claim whatver you have spent for your work trip. Keep receipts,etcetc

    • +1 vote

      Thanks!

      So assuming one does not fly for leisure purposes, it makes more sense to pay for these flights upfront (and lounge access) since the card benefits are non-deductible.

      •  

        If you pay, yeh sure you get tax deduction…But why? Tax deduction doesn't mean you pay 1 dollar, you get 1 dollar back.

        It would make sense, however, if you want to save the flight for your holiday/leisure. Then you can buy a flight (for work) and get that deducted.

        • +1 vote

          Tax deduction doesn't mean you pay 1 dollar, you get 1 dollar back.

          Yep so many people get this part so wrong…. Its not a 1:1 deduction on tax paid, so if you spend $1000, you don't get $1000 back. Depending on your tax rate, you'll see $300-480 of it back.

          •  

            @JimmyF: The really one is the people who don't pay income tax and think they can claim deductions and get the tax office to pay them, LOL.

          • +1 vote

            @JimmyF: Yep just truly shows how clueless they arr

            Like when someone says to you if you buy something that doesnt work or cant refunded, "oh you can claim it on tax"
            Like it means they get it all back

            I usually say to them "cool ok, give me $500 and ill give you a tax invoice for $500, deal?"

            Very confused looks follow

            •  

              @hellohello123:

              I usually say to them "cool ok, give me $500 and ill give you a tax invoice for $500, deal?"

              hahahaha I love it… Tell them instead you'll do, give me $400 and i'll give you a tax invoice for $800 and you claim it on tax. This way we both get $400, wink wink

              (Clearly you have to give them a fake invoice for this to work, but still).

              •  

                @JimmyF: actually, you dont need a fake invoice, you just need an ABN, to create invoices

                so you give them an invoice for $1000, they give you $1000 cash

                you declare the $1k income, you have to pay tax on it which is going to be 0%-45% depending on your income,
                regardless your miminium $550 in front

                speaking of clueless people liek those people that go and buy a $2500 computer just to browse internet at tax time, while they proudly gloat its all a tax deductions……

                you could explain to them, youd be well in front had you spent $800 on a computer SHOCK HORROR WITHOUT a tax deduction

                but thats like trying to convince a non believer that the earth isnt flat

  • +1 vote

    I know that I claim a tax deduction on flights for work purposes; however, if I bought a ticket using the flight provided by the Amex Velocity card - does that constitute a claimable item if I use that flight to move between the sydney and melbourne offices for work?

    You can claim the cost of the flight, which was $0.

    I was thinking that at least a portion of the $375 annual fee could be deductible for this purpose.

    Nope.

  • -1 vote

    Lots of certainty in some posts here, which I think is misplaced.
    You can certainly claim a portion of the cost of a credit card annual fee if you use it to keep track of business expenses. If you use it for no other expenses it would be reasonable to claim the whole fee.

    It isn’t clear if you would get reimbursed for a regular flight from your work. If yes, ask them if they would reimburse you the published fare if you use the freebie. In that case, you would effectively be selling them the fare. No tax deduction, but you would get the cash.

    • +1 vote

      The question was whether op could apportion the flight ticket from the annual fee. You can't.

      If the question was, could you claim the annual fee, well yes i suppose. But only if you have kept receipts and are able to calculate the percentage of business use, then yes you can claim a percentage of the annual fee.

      If you spent 20k on your card in a year, and you spent 1k on business expense, then you'd have 5pc claimable, which amounts to about 19 dollars. Everything counts I suppose.

      But this wasn't pop's original q

    •  

      which I think is misplaced.

      Your answer is misplaced and isn't answering what the OP asked. The simple fact is they can't claim the free flight as it has no dollar value or any part of the yearly fee credit card fee that gave them the free flight.

      It isn’t clear if you would get reimbursed for a regular flight from your work.

      If claiming on tax, then they can't be getting reimbursed via work. You're not allowed to double dip ;)

  •  

    Talk to an accountant.

    Mskeggs is right. Generally if it's used for business purposes / making an income it is deductable. It depends how the ATO treats the fee. It is likely similar to when you buy gift cards and later spend it on a business related expense, you can claim the purchase as a tax deduction.

    There are lots of odd exceptions so do double check if concerned. For example, if you take money out of your mortgage to invest, the interest is not deductable. Take out a loan especially for the investment, then you can deduct.

    Mbck is right in the sense that the fee for a card effectively solely used for business purposes is tax deductable. This is the case for my business.

    •  

      that the fee for a card effectively solely used for business purposes is tax deductable. This is the case for my business.

      Yes but that wasn't the OPs question. The fact is they can't claim the free flight as it has no dollar value to claim or any part of the yearly fee credit card fee that gave them the free flight.

      They can claim the yearly fee if the card is used solely for business purposes, but based on the fact the OP is asking to claim a part of the yearly fee, sounds like its a mixed use card. So it becomes very tricky and would need to calc the entire year spend to work out the usage split.

      At the end of the day, claiming $400 credit card fee, its going to put $400 back in your pocket on your tax return.

  •  

    Here's a better option

    Sell the flight you get on the credit card
    Use the money to buy a ticket to Melbourne

    That should be cheaper and it would be tax deductible because you've spent it

    •  

      Not sure if it's the same with Velocity Platinum but my ANZ card gives me a free return flight too, but on the condition it can only be used by me and can't be transferred to anyone else.

      •  

        Velocity Amex is much better in that regard. It is transferrable and u dont need to book 2 months in advanced like the anz

  •  

    Refer to Qusestion 1, 6, 7, 8 of below link
    https://www.ato.gov.au/law/view/document?locid=%27FOI/101425...
    The link seems to have the answer to your question

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