Each industry requires different services from its workers and as such, knowing all the deductions that may be available to you and your field of work can be challenging to say the least. This can then create uncertainty as to whether you're successfully maximising your tax deductions each year.
This article focuses on IT Professionals and looks at the majority of deductions you may be able to claim in relation to your work in the field and hopefully, will give you a better understanding of what might be applicable to your personal situation.
Applying the potential deduction to your situation can be difficult, so we always encourage speaking with your accountant or tax agent for confirmation and total peace of mind.
Car, Transport & Travel Expenses
Tax deductions can be claimed for the cost of travelling for work purposes. This can include travelling via your car or by using other means of transport such as taxis or public transport.
What constitutes as work related travel varies on a case-by-case basis but may include:
Travelling between two separate jobs e.g., from the office where you are an IT consultant to the business you work in part time as head of IT
Travelling between alternative places of work for the same job on the same day e.g., from the office to visit a client
Travel to and from home to an alternative place of work e.g., driving directly to your client’s location from home.
In limited circumstances, you may also be able to make a claim when travelling between home and work, e.g. if you are required to carry bulky tools or equipment. You can also claim the cost of parking fees and tolls whilst performing work-related travel as a tax deduction.
If required to travel overnight for work, you can also claim accommodation, meals and incidental expenses associated with that travel as a tax deduction.
There are 2 broad methods for making a car claim.
One requiring you to maintain a 12-week logbook, and the other, simpler method requiring you to just keep a simple log of car travel and related kilometres, from which you can make a claim on a cents per kilometre basis (capped at 5,000 kms per year).
We recommend discussing your situation with a tax agent to help decide if the additional record keeping of a logbook will be worthwhile to your claim.
Working From Home
You can claim a deduction for some of the expenses you incur while working from home. Working from home can include work done outside normal hours such as logging on to provide remote support through the night if a critical system goes offline.
The deductible expenditure may include:
Mobile Phone costs, mobile data costs & interest costs
Electricity/gas costs
The purchase of office equipment and furniture plus any repairs to these
Stationery and office supplies
If you don't keep specific records or receipts for the above items, you can still make a claim using the cents per hour method.
In short, if you keep an appropriate diary/calendar/timesheet record of hours worked from home, the ATO allows a deduction of 67 cents per hour worked from home.
Uniform and Clothing Items
You may be able to claim a tax deduction for the cost of buying, repairing & cleaning (including dry cleaning and laundromat costs) clothing you purchase where it is compulsory uniform that has the firm’s logo or something to identify you as an employee of the firm.
All conventional clothing including suits and suit pants or other office attire are not tax deductible.
Phone & Internet
You can claim the cost of your mobile phone, the cost of your mobile data and internet costs on your phone and other devices when used for work related purposes.
You must incur these costs yourself and they cannot be reimbursed by your employer if you wish to claim a deduction.
Tools & Equipment
As an IT professional, it would be reasonable to expect that you may be required to purchase some computer hardware in order to complete your work. If you pay for this yourself and are not reimbursed by your employer, then you will be entitled to claim a deduction to the extent the equipment is used for work purposes. Note: items that cost more then $300 will need to be depreciated over a few years rather than claimed all at once, something a tax agent can assist with. Protective Eyewear
As an IT professional, you may be exposed to dangerous situations such as soldering faulty computer parts. A lesser known deduction here that you can take advantage of to protect your eyes is to make a claim for protective eyewear that you use if doing this type of work. Note however that regular prescription glasses are not deductible.
Self-Education
Self-education costs can be claimed if they relate to your current employment and the cost incurred is relating to either:
Maintaining or improving skills and knowledge required for your current duties.
Something that will or is likely to result in increased income from your current employment.
An example of this may be completing training courses to meet your CPD requirements or someone working as an IT Professional completing a Masters of IT/Computer Science.
If the expense relates to getting a new job or new employment position, then generally it is not deductible.
You also can’t claim the cost of HELP/HECS/VET loan repayments etc if you fund the course through one of these loan types.
If the self-education cost is one of the above-mentioned scenarios, you can claim the cost of the following:
Course/tuition fees
Student/amenity fees
Cost of textbooks, academic journals, and stationery
Any equipment/assets purchased for work-related study
Home expenses while studying at home (refer to working from home expenses below)
If the course is at a site, you can claim the cost of travel to the site whether you are coming from home to work and then from the site to home or work.
You can also claim the cost of first aid courses if you are required to know first aid for emergency work situations or are a designated first aid person.
It’s important to consider all your expenditure incurred throughout the year to ensure you are claiming the maximum amount of deductions that you are in fact entitled to claim.
If you are unsure on anything mentioned above and whether you can make a claim or not, the best way to confirm is by speaking with an accountant or tax agent.
If you wish to enquire with myself or my business partner Jayden Hamer, you may do so from the contact page of our website or by emailing your enquiry to enquiries@jetaa.com.au.
Written by Ben Audino
