Money Hack: You could claim your handbag as a tax deduction
Looking to buy a new handbag in the EOFY sales? You might be able to claim it as a tax deduction.
The end of financial year sales are in full swing and just about every major retailer is having a clearance sale. Sites like THE ICONIC, , Forever New and more are all having insane sales with up to 80% off some pieces.
All this sale craziness is a pretty darn good incentive to go ahead and treat yourself. But with rent to pay and a future house to save for, sometimes it's hard to justify that new pair of shoes.
Well, we can't really help you with shoes or clothes but we might just be able to help you justify buying a new bag. If your handbag meets certain conditions then you may be able to claim it as a tax deduction. How good is that?
If you have a handbag that you can justify as being used purely for work purposes, you should be able to claim it as a tax deduction.
When choosing a handbag, pick one that can carry your laptop and any other work paraphernalia you need such as documents and files. Also, it's a good idea to have a separate handbag for the weekend. If you use your handbag full time then it's not technically just for work and you might have to keep a log book to prove usage.
It's always best to check with your accountant, but generally, for handbags under $300, you can claim a deduction immediately. If you plan to use it only for work purposes then you should be able to claim the full amount. If you use it outside of work you should be able to claim the percentage that you use for work.
If your handbag is over $300 you'll need to stretch out the deduction over a few years (my accountant recommended three years) and account for depreciation. Remember to keep all receipts and always have evidence to justify your claim.
And if you're not quite sure how to claim this expense, you should speak to an accountant. This advice is general so an accountant will be better equipped to see if it applies to your personal circumstances. Plus, accountant fees are also tax deductible.
If you're interested in going ahead and treating yourself to a new bag, check out our list of end of financial year sales.
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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