10 tax deductions you probably can’t claim in 2017

Angus Kidman 28 June 2017

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Laundry? Self-education? You'll want to check twice.

Yes, there are some odd tax deductions available (handbags, anyone?) However, there are also a lot of myths and mistaken beliefs about what you can actually claim as deductions against your income.

Courtesy of the Australian Taxation Office (ATO), here are 10 of the most common mistaken deductions and why you probably don't qualify to make them, especially if you're a regular salaried employer. Don't make the mistake of claiming these when you aren't entitled; deductions are being carefully scrutinised in 2017.

1. Everyday work clothing

Even if your workplace has a specific dress code (such as waiters being required to wear black pants), you can't claim the cost of buying those clothes if they could also be worn for other purposes. Generally speaking, only the cost of clothing which is specific to a particular occupation or which displays a company logo can be claimed as an expense. So that hideous polo shirt with the name of your employer on it does qualify, as would steel-capped boots if you work in construction.

2. Laundry expenses

You can't claim the cost of cleaning work clothes unless they are eligible for being claimed as an expense (as we've just discussed). If you do qualify, you also need to use a well-defined method to identify the costs. The ATO's recommended approach is to claim $1 per load if you do a load entirely consisting of work clothes, or 50 cents a load if you also wash other items at the same time.

3. Travel between work and home

Sorry: even though you can't generally do your job without travelling to work first, that doesn't mean you can claim the cost of those trips. They're considered private travel.

4. Car expenses that have been salary sacrificed

You also can't claim the cost of car expenses if your car is supplied through work via a salary sacrificing arrangement. (You've already potentially seen a tax benefit through the salary sacrifice, so you can't double-dip.)

5. Meal expenses for travel

Sticking with the travel theme, you also can't usually claim the cost of meal expenses while you're travelling for work (after all, you'd have to eat anyway). The one possible exception? If you have to work away from home overnight. Even then, you can't claim a deduction if your employer has reimbursed you for those expenses already.

6. Costs of private travel

It's not unusual to take a work trip that also includes personal travel. If you're claiming any deductions from that trip, you have to make sure you only claim the work-related portion. In other words: your Disneyland passes are not going to qualify.

7. Self-education expenses unrelated to your current job

You can't claim self-education expenses if what you're studying isn't directly connected to your current job. The ATO makes this point bluntly: "your future or dream jobs don't count".

8. HELP scheme costs

There are plans afoot to make people pay off university HELP debts sooner. Those might not come to pass, but no matter what level of payments you're making, you can't claim those expenses as a tax deduction.

9. Private use of your phone or Internet service

If your work requires you to have a mobile phone (and doesn't pay for it), you may be able to claim part of the monthly costs. However, you're expected to divide the cost so you only count the work-related portion. That's the case even if your plan includes unlimited calls and texts; you still need to only claim a portion of it.

10. Tools and equipment costing more than $300

Tools which cost more than $300 can't be generally claimed as a single deduction; you have to depreciate them over a number of years. Note that the rules for depreciation differ if you're running your own small business; this is definitely an area where professional advice helps!


Check out our tax time 2017 guides below, or head to our detailed features on getting the most from your tax return.

TAX TIME 2017 GUIDES

DISCLAIMER: This article is general advice. It does not consider your own personal circumstances and may not be applicable to you. You should obtain professional advice and consider your own situation before acting on anything contained in our article.

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