Tax deductions lower the amount of tax you pay by reducing your assessable income. There are plenty of rules about what you can and can’t claim and much of this depends on your profession.
Simply, the claim has to be relevant to your job and it can’t be a private or domestic expense.
This means that if you are a professional lifeguard and you buy sunscreen and swimming goggles, you can probably deduct those. But if you’re a volunteer lifesaver who works in a supermarket, you can’t. You should always keep your receipts if you’re planning on claiming something. Most importantly, always check with your Etax accountant if you’re not sure!
It’s truly impressive (and sometimes hilarious) what some people are eligible to claim as tax deductions. We’ve put together some of the more surprising tax deductions we’ve come across at Etax.
This is the item on our list of surprising tax deductions that could apply to the most people. Just like a suitcases used to transport files, or a laptop bag, handbags can be claimed as a work expense. However, it must be demonstrable that you use it to carry documents, your laptop or something similar to and from work. Be warned: an unreasonably high figure here for a designer bag will likely catch the attention of the ATO. And, if you use the bag for work and personal use you must apportion your claim. Read more here about claiming handbags as a tax deduction.
It definitely sounds like a joke, but in recent years professional gaming and e-sports have taken huge strides forward. Some global tournaments offer prize money equivalent to the Australian Open tennis. For people who spend their lives competing on consoles for prize money, an Xbox or Playstation 5 is a legitimate work expense, just like a tennis racquet would be for Roger Federer. (Even though Federer probably hasn’t paid for a racquet in years!)
Similarly, gaming consoles in certain places of work, such as a waiting room that caters for children, or a room where clients wait at an advertising firm, might also be allowable. It pays to think laterally about what might constitute a legitimate business expense in your workplace. And who knows, you might just be able to convince your boss to invest in a new console for your office!
Paintings and Works of Art
If you have a waiting room, board room or other business area for your small business then the cost of an artwork or piece of memorabilia can be an allowable deduction. But it’s not advisable to try and claim an expensive framed jersey as a business expense if you don’t have a small business as that likely falls into the “private or domestic” category.
Man’s Best Friend
If you honestly buy a dog to guard your business, or use a working dog on a farm, then your four-legged friend may be a legitimate business expense you can claim. However, the office lap-dog in your trendy start-up might be a different matter.
Swords (yes, really!)
You’ve probably seen street performers who swallow swords, twirl fire, and baffle people with card tricks – sometimes all at once. If you work in this field, then those things are tools of the trade. Just like a hammer is for a carpenter, so you’re all clear to claim!
The final item of our list of surprising tax deductions is alcohol. Yes, booze can be a claimable expense—but only if your business is directly related to that purchase. Wine merchants and restaurant consultants who offer tastings to entice clients are two professions that could probably claim alcohol on their tax returns. Bad news if you were hoping to stock up the office fridge at a reduced cost!
The Wrap Up
Lists like this are fun, but it pays to remember that with better ATO data analysis and tracking, your tax return is being looked at carefully by ATO computers. The troubles that can arise if your return is flagged for audit far outweigh the benefit of tweaking your claims. Make sure you follow the rules and keep those receipts just in case!
The best way to be sure you get the maximum deductions for your profession is get onto Etax, where you can see what other people claim as deductions, to help you remember valuable items you might have paid for.