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  • Common expenses T–W

    Details on claiming common engineer expenses for:

    Technical or professional publications

    You can claim a deduction for the cost of journals, periodicals and magazines that have content sufficiently connected to your employment as an engineer.

    Tools and equipment

    You can claim a deduction for tools and equipment if you use them to perform your duties as an engineer.

    If a tool or item of equipment cost you $300 or less, and you use it for work only, you can claim a deduction for the whole cost in the year you purchased it. Otherwise, you can claim a deduction for the cost over the life of the item (that is, decline in value).

    If the item is part of a set that together cost more than $300, you can claim a deduction for the set over the life of the asset.

    If you also use the tool or item of equipment for private purposes, you can only claim the work-related portion.

    If you bought the tool or equipment part way through the year, you can only claim a deduction for the portion of the year that you owned it.

    You can also claim a deduction for the cost of repairs to tools and equipment.

    You can't claim a deduction for tools and equipment that are supplied by your employer or another person.

    Example: depreciating (no immediate deduction)

    Anna needed a new set of 16 spanners for work. She couldn't afford the $330 cost, so she bought them all individually over 2019.

    Although they only cost $22 each, Anna can't claim an immediate deduction for the spanners because they are part of a set she bought in the 2019 income year that cost more than $300. Anna can claim a deduction for the decline in value of the set, which in the end cost $352.

    If in a following year, Anna breaks one of the spanners and has to buy a replacement, she'll be able to claim an immediate deduction for the replacement because it won’t be part of a set she bought in that year that cost more than $300.

    End of example

     

    Example: effective life

    Tal purchased a tool set on 5 September for $1,500 and only uses them for work purposes.

    He visits our website and looks up our ruling on the effective life of depreciating assets. The ruling says the effective life of loose tools is five years.

    He works out the deduction for the decline in value of his tool set using the prime cost method in this way:

    • (Asset cost ×(days held ÷ 365) × (work use percentage ÷ 5)

    He has held the tools for 300 days and his work use percentage is 100%, that is:

    • $1,500 × (300÷ 365) × (100% ÷ 5) = $246

    Tal can therefore claim $246 for the decline in value of his tool set in the first year. Using the same method, he will also be able to claim $300 per year in the following four years and $54 in the final (sixth) year.

    End of example

    See also:

    Travel expenses

    You can claim a deduction for the costs you incur on accommodation, meals and incidental expenses when you're required to travel for work and sleep away from your home overnight in the course of performing your employment duties – for example, travelling interstate to oversee on-site projects as part of your role as an electrical engineer.

    You can't claim a deduction for accommodation where you:

    • haven't incurred any accommodation expenses
    • sleep in accommodation provided by your employer.

    Receiving a travel allowance from your employer doesn’t automatically mean you can claim a deduction. You still need to show:

    • you were away overnight
    • you spent the money yourself
    • the travel was directly related to earning your employment income
    • how you calculated your claim.

    Each year, we set a reasonable amount for travel expenses. Generally, you are required to get and keep written evidence, such as receipts, when you claim a deduction for travel expenses. However, if you spent and are claiming:

    • a deduction up to the reasonable amount, you don't have to get and keep receipts
    • more than the reasonable amount, you must get and keep receipts for all your expenses.

    Example: living away from home allowance

    Joe is a civil engineer. He lives in the city with his family and applied for a job to work on a large construction project near a country town for 12 months. He is paid a living-away-from-home allowance by the construction company to meet his accommodation and meal costs in the country town.

    The allowance isn't income and shouldn't be shown on Joe's income statement. He can't claim a deduction for his accommodation and meal costs while living away for work.

    End of example

     

    Example: reasonable allowance amount

    Antoni travels from Adelaide to Mt Gambier for a job. Away from home for five nights, his employer pays him a travel allowance of $110 per night for accommodation, meals and incidentals. The allowance isn't shown on his income statement.

    The travel allowance amount paid to Antoni is less than the reasonable allowance amount and he spends all of the travel allowance on his travel expenses.

    Antoni chooses not to include his allowance on his tax return because:

    • it's less than the reasonable allowance amount
    • it's not shown on his income statement
    • he spends it all to cover his travel expenses.

    This means Antoni can't claim a deduction for his expenses on his tax return.

    End of example

    See also:

    Union and professional association fees

    You can claim a deduction for union and professional association fees you pay. If the amount you paid is shown on your payment summary or income statement, you can use it to prove your claim.

    See also:

    Working from home

    You can claim a deduction for the work-related portion of running expenses for an office or a study at home that you use to earn your income working as an engineer.

    Running expenses include:

    • decline in value of home office equipment
    • the cost of repairs to your home office furniture and fittings
    • electricity for heating, cooling, lighting and cleaning expenses
    • internet.

    You can only claim a deduction for the additional running costs incurred as a result of working from home – for example, if you work in your lounge-room when others are also present, the cost of lighting and heating or cooling that room is not deductible because there is no additional cost for those expenses as a result of you working from home.

    You can’t claim occupancy expenses, such as rent, rates, mortgage interest and house insurance premiums.

    In limited circumstances, you may be able to claim a deduction if your home office is considered to be a 'place of business'. If your only income is paid to you as an employee, you aren't considered to be carrying on a business.

    Diary records noting the time the home office was used for work are acceptable evidence of a connection between the use of a home office and your work. You'll need to keep diary records during a representative four-week period.

    The Home office expenses calculator helps calculate the amount you can claim as a deduction for home office expenses.

    Example – working from home

    Calvin is employed as engineer by ABC Pty Ltd, a company based in the Melbourne CBD. Calvin lives in a rented property in Geelong and wants to limit his need to commute to the office in the Melbourne CBD. His employer gives him permission to work frequently from home, but he needs to come into the office for team meetings and on other days as required.

    Calvin sets up a spare room as his work office and he doesn't use it for any other purpose. Calvin would be able to claim running expenses in respect of his home office but would not be able to claim any portion of his rent as it is a cost of maintaining a place to live and domestic in nature (that is, an occupancy expense).

    End of example

    See also:

    For more engineer expenses, see:

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      Last modified: 16 Oct 2019QC 22571