Offer for Job Starting in January: Can I Buy a Laptop Now and Claim It as a Tax-Deduction?

fd9 on 23/07/2022 - 07:02
Last edited 23/07/2022 - 07:17

Hi all,

I have received an email written job offer for a position starting in January (not the actual contract yet). I graduate uni this November.

There is Lenovo laptop I would like to buy to use whilst in this job under "self-education expenses" as I still need to do further study in this line of work after I graduate. Note I am not referring to my current studies, I mean in this line of work I still need to do further study after starting work to become fully qualified.

The laptop I am interested in has a 10 week shipping time, so I would like to order it now.

I am wondering, if I order it now, can I still claim it under my tax deduction (as depreciation) for 2023, 2024 - even though I haven't started working yet?

Googling, this is the main thing I could find on the matter: https://community.ato.gov.au/s/question/a0J9s0000001AOP/p000…

Please note I did ask this question on another website but got conflicting answers with 1 person saying its okay, 2 people saying it's not. I think people on Ozbargain may have had more experience with this matter so thought I would ask here. Its a $2800 Thinkpad so would be a decent deduction. If not for the deduction I would buy a cheaper laptop.

Thank you!

Financial Computer Laptop

Comments

  • apsilon on 23/07/2022 - 07:15
    +6

    Speak to your accountant. IMO, no you can't as you can't show a link between your employment and the course and ATO eligibility for education claims defines it as "current employment" but I'm not an expert on the matter.

    • fd9 on 23/07/2022 - 07:16

      Thanks for the reply.
      I see, thanks. Perhaps I should just avoid the worry.
      I haven't used an account yet as my tax returns have all been pretty straight-forward but it might be time to get one.

      I just re-read your reply and want to make sure I didn't confuse you. When I said self-education, I don't mean my current uni studies.
      Rather, in the line of work I am going into, I need to do further study and exams to become fully qualified. I meant self-education for that, not my current course.

      • oscargamer on 23/07/2022 - 07:38
        +4

        No. You need to have a current job to claim any deductions relating to that job…..

        • fd9 on 23/07/2022 - 07:52

          Thanks for the reply. I think I'll just skip purchasing it for now.

      • apsilon on 23/07/2022 - 07:58
        +5

        No confusion, ATO says it must directly relate to your current employment. If you haven't started the job then obviously it doesn't relate to it. Furthermore, it can't just relate to your field, it must relate directly to specific skills in your current employment or be able to demonstrate it will directly result in an increase in income for your current employment.

        • fd9 on 23/07/2022 - 08:01

          Great. Thanks for clarifying and for the info.

          The study will be used basically to advance / get promoted and hence increase income.

          I see. What you said makes sense. I’ll avoid this purchase. I appreciate the help.

          • WreckTangle on 23/07/2022 - 08:31
            +2

            @fd9: Self related study can’t be claimed if its related to get a promotion or role advancement. It must be related to your actual role at the time are using the laptop. Even then i believe you can only claim a portion of equipment cost based on your actual work/related education use.

            • fd9 on 23/07/2022 - 08:32

              @WreckTangle: Interesting. I wasn’t aware of that / misunderstood what self education meant. Thank you very much for informing me.

  • belesci on 23/07/2022 - 08:14
    -3

    Buy now and claim for ‘last’ financial year? Maybe reconsider that

    • Tee Rex Arms on 23/07/2022 - 08:18
      +5

      Lol phux sake…

    • kerfuffle on 23/07/2022 - 08:22
      +1

      Clearly has no idea how tax deductions work.

    • Jimothy Wongingtons on 23/07/2022 - 09:26
      +4

      It is clear that basic tax and finance literacy needs to be taught in high school early years….

      • Vote for Pedro on 24/07/2022 - 12:39

        Good riddance to the dollarmites. Marketing disguised as education

  • thirtysixd on 23/07/2022 - 09:10
    +2

    You can't because its not related to current income.

    The loophole would be to find some work related to whatever you are doing in the future.

    • fd9 on 23/07/2022 - 09:43

      I see. Thanks for the info. Funny thing is I am currently doing full time work-experience / placement in this area. Unfortunately its unpaid so that won't help haha.

  • bobbified on 23/07/2022 - 11:05

    It's one of those things that is technically against the rules, but it's something that'll be quite easy to explain away if you had to.

    • fd9 on 23/07/2022 - 11:11

      Ah
      One of those things ;)
      Great!

      • bobbified on 23/07/2022 - 11:18

        If you like living in the 'grey' area like I do, this is one of those things you would do. haha

        Your next tax return is not due until 30 June 2022.. which would be six months after you've started your job.

        • fd9 on 23/07/2022 - 11:20

          My cookies have made advertisements for said laptop that I want to buy present in the banner to the right hands side of this webpage. Is that a sign? Haha

          Its all a bit confusing since like I will be buying uniforms for the job perhaps a month before. If I can't claim this laptop I shouldn't be able to claim those either.

          • bobbified on 23/07/2022 - 11:23
            +1

            @fd9: It's a signnnn! But you take up the offers at your own risk! (the small risk of getting busted that there is!) haha

            • fd9 on 23/07/2022 - 11:24

              @bobbified: Hahahha. I'm not even saving any money. The tax return just made me spend an extra 33% of what I would usually spend so I'll be breaking even but with an i7 instead of an i5.

              Whenever there is a chance of getting busted one needs to do a cost-benefit analysis.

              Benefit: 900 bux.
              Cost: going to jail :P ?

              • bobbified on 23/07/2022 - 11:26
                +1

                @fd9: Depending on the company you're going to be working at, it might be better to see if they allow salary sacrificing of an electronic device, including a laptop. You get your tax deduction for the whole thing upfront instead of having to depreciate it over a few years.

                • fd9 on 23/07/2022 - 11:27

                  @bobbified: Yea we do have salary sacrifice as an option (though thanks for bringing it up in case I didn't know)!. It just means waiting a couple of months for all the HR stuff prior to the job starting to get sorted. I might just buy a cheaper laptop now and get the one I really want through salary sacrifice when I start.

                  • bobbified on 23/07/2022 - 11:30
                    +2

                    @fd9: If you don't need actually need it now, salary sacrificing is a lot cleaner from an audit point of view. I do it every year just for the sake of it to save almost 50% on a new laptop or phone.

                    • fd9 on 23/07/2022 - 11:42

                      @bobbified: That's amazing. Didn't realise the benefit via salary sac would be 50% off. I was factoring in roughly 30% savings via tax deduction.

                      • bobbified on 23/07/2022 - 11:46
                        +1

                        @fd9: The amount you save would depend on your own marginal tax rate.

                        Most people would be in that 32.5 and-37 (plus 2% medicare) range. So you get that % off ex-GST price, and then you get the GST refunded.

                        • fd9 on 23/07/2022 - 11:47
                          +1

                          @bobbified: Oh wow. Had no idea about the GST refund part. Time to buy a 10% even more expensive laptop haha. In that case, I think its definitely going to be worthwhile me waiting it out. Thanks bobby! And hopefully the X1 Carbon 9th Gen will have gone down in price a bit more by then too.

                          • bobbified on 23/07/2022 - 11:50
                            +1

                            @fd9: It gets better - when there's an eBay sale for a company like Dell, you pay the amount, less the eBay discount (10, 15, 20 or whatever %) as your final price. But Dell would issue a Tax Invoice that has the full amount on it (without the discount). If you submit that to your company for Salary Sacrifice…… (you can do the sums).. haha

                            • fd9 on 23/07/2022 - 11:53

                              @bobbified: Omg. The things I have been missing out on being unemployed student on centrelink …. (post-grad studies so its been almost 8 years of study now haha).

                              Hey you might be the perfect person to ask. My salary sacrifice has the option of a reimbursement which is what I think means me buying it and then submitting the invoice. In that case how is it a sacrifice since I already bought it with my post-tax money?

                              Like I thought the whole idea with salary sacrifice is that the company buys it from me pre-tax salary and deducts that from my wage -> hence giving me additional buying power.

                              But if I buy it myself with my post-tax money via ebay - doesn't that ruin the idea about buying it pre-tax?

                              I am quite confused by it all.

                              • bobbified on 23/07/2022 - 11:56
                                +1

                                @fd9:

                                My salary sacrifice has the option of a reimbursement which is what I think means me buying it and then submitting the invoice. In that case how is it a sacrifice since I already bought it with my post-tax money?

                                When you submit your receipt, they will deduct the amount you spent on the laptop off your gross pay, tax the remainder (as per PAYG) and then refund you the amount (that you paid for the laptop). The final outcome is that your taxable income gets reduced by the cost of the laptop).

                                • fd9 on 23/07/2022 - 11:58
                                  +2

                                  @bobbified: Ah I see. Hey thanks for taking the time to explain everything this morning.
                                  That's golden advice, and why I always take financial advice from strangers off the internet :)
                                  Haha nah but I do really appreciate it - and now I know all this it makes the decision much easier just to wait it out and not buy until i start wait.

  • SmiTTy on 23/07/2022 - 11:17
    +3

    I'm not an accountant, and this isn't advice. And I don't actually know the right answer… So take what I say with a grain of salt. Do your own research….

    But… Here's a different perspective.
    You could buy your laptop (because u want it) but right now u can't claim anything because, well, you're not working. But if your laptop is greater than $300 you couldn't claim the whole thing anyway. You'd have to depreciate the value over a period of years (defined by the ATO). So what you'd do, is buy the laptop now and when u start working, apportion your work usage and claim that depreciation portion this FY and the following FY(s) .

    For example, if the laptop needs to be depreciated over 2 years, and you buy it for $2000 that means you might depreciate 1k in year 1 and 1k in year 2 (there are other ways to depreciate, dyor, but keeping simple for this example). But since you're not working until next year, you don't get to depreciate anything in the first 6 months of owning that laptop. Then when u start your job, you might be using your laptop half the time for work and the other half for personal. So you'd depreciate half the amount for that period (ie if it was 1k a year, but you're working half a year so $500, but you're using it 50% of the time so $250).

    • fd9 on 23/07/2022 - 11:19

      Thanks for the reply. I was actually thinking about this with some other stuff I bought (monitor, desktop PC, headphones etc). But was wondering since I didn't even have the job when bought those things - whether it would be allowed - since I would have no way of claiming I actually bought it for the job.

      • SmiTTy on 23/07/2022 - 11:20

        Yes you could (*1)

        (*1)not an accountant, dyor, don't take financial advice from strangers on the interweb

        • fd9 on 23/07/2022 - 11:43

          Very very interesting. I'll have to look more deeply into this. Thanks for raising it!

      • kiitos on 25/07/2022 - 09:15

        I don't think headphones could be claimed

  • EFC94 on 23/07/2022 - 16:14

    Someone correct me if I'm wrong, but it sounds as though you are using the laptop for studying an online course? In which case I wouldn't have thought that the laptop could even be claimed, but rather you would claim the course as the expense?

  • geshc on 23/07/2022 - 17:03

    edit: oops wrong thread lol

  • RMBC on 24/07/2022 - 10:06
    +3

    Accountant here, short answer is no.

    Longer answer is there are two issues, and you're failing on both. First is self education, which needs to either be connected to a current role, or has a sufficient connection with pay increases/promotions for current role

    Second issue is that you aren't in the role yet, so the purchase isn't connected to the role

    In summary, you are neither in the role you talk about, or studying for benefit in that role. You're too early on both

    • fd9 on 24/07/2022 - 10:18
      +1

      Hey thanks so much for the answer and explanation, I appreciate it.
      I will definitely avoid the purchase until I start :)

      • RMBC on 24/07/2022 - 10:37
        +1

        My pleasure, good luck with the new job and study

        • fd9 on 24/07/2022 - 10:41
          +1

          Thank you :D ! Have a great Sunday.

  • Geekomatic on 24/07/2022 - 22:01
    +1

    Just keep your eyes on OzB. You'll likely get a better deal by Jan. Imho.

    • fd9 on 25/07/2022 - 18:48

      Yea that’s true, the model should come down in price. Shame I can’t buy during Black Friday says but it’s all good :)

      Not that I’d do the above - but out of curiosity - wonder if they data match invoices with major sellers or are they not that sophisticated yet

  • kev98 on 25/07/2022 - 00:51

    /shittyTip

    Get some white out and change the date on the receipt

    Seriously though: you can’t claim 100% anyway and will need to depreciate. Talk to accountant but I don’t see why you couldn’t buy now then claim % of usage from date your employment starts.

    • fd9 on 25/07/2022 - 18:50

      Thanks for the reply! An account replied above so I guess it’s a no go for now haha.

      Haha nice ozbargain /r life pro tips

  • ColtNoir on 25/07/2022 - 10:54
    +2

    Get a tax accountant for best advice but a few general things I’ve picked up on

    1. You can only claim the portion used for work eg 30%
    2. It has to be ‘in service’ eg only applies to when you received the laptop
    3. As it’s likely over $300 you can only depreciate it over its lifespan, usually 3 years for a laptop
    4. As others have mentioned it must relate to your current job, not for future advancement/positions. For example studying/completing industry certifications for your current role
    • fd9 on 25/07/2022 - 18:49
      +1

      Thanks for write up :) Appreciate it

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