Work-related Deductions

Work-related Deductions

Section 8-1 of Income Tax A (ITAA 1997) Assessment Act 1997 categorises deductions into general deductions and specific deductions. Generally a deduction is allowed if

  • the expenses has been incurred in earning the person’s assessable income, or incurred in carrying on a business for the purpose of earning assessable income, and
  • it is not private (domestic), or
  • it is not capital in nature, and
  • the person holds the relevant written evidence for the deduction claimed.

Substantiation:

If the person claims more than $300 for work-related expenses, he or she must keep written evidence. The $300 does not include claims for car, award transport payment allowance, meal allowance and travel allowance expenses.

Written records include:

  • paper or electronic copies of documents, such as invoices, receipts or delivery notes
  • statements from bank statements or credit cards
  • BPAY receipt numbers
  • Pay As You Go (PAYG) payment summaries.
  • warranty documents.

Employees are not required to show records for the following:

  • sun protections: sunscreens, hats, sunglasses (see Federal Court decision in Morris Ors v FC of C (2002) ATC 4004.

 

  • some car expenses (cents/per km method) if all the above-mentioned costs including the car expense is less than $300 in total.

 

Phone, computer & Internet expenses

Employees may be able to claim some of their home telephone, computer and internet expenses provided the claims are directly related to their employment.

The cost of installing a home phone or maintaining a silent line is not deductible.

The cost of work-related calls is deductible if they can be identified for the itemised account. Receipts or other documentary evidence of the total cost of calls must be maintained.

Depreciation:

Claims for depreciation of computer, equipment   (printers, scanners or modems) and software should be based on reasonable estimate of their business or work-related usage.

The tax office will accept evidences like diary report stating the business/or work usage as oppose to the private usage. The tax office also accepts a reasonable estimation based on the diary record. The taxpayer must keep receipts and evidence.