myTax 2017 Claiming deductions

You may be able to claim deductions for work-related expenses you incurred while performing your job as an employee.

You incur an expense in an income year when:

• you receive a bill or invoice for an expense that you are liable for and must pay (even if you don’t pay it until after the end of the income year), or
• you do not receive a bill or invoice but you are charged and you pay for the expense.

If your expense includes an amount of goods and services tax (GST), the GST is part of the total expense and is therefore part of any deduction. For example, if you incurred union fees of $440 which included $40 GST, you claim a deduction for $440.

Basic rules

The expense must not be private, domestic or capital in nature. For example, the costs of normal travel to and from work, and buying lunch each day are private expenses. If you incurred an expense that was both work-related and private or domestic in nature, you can claim a deduction only for the work-related portion of the expense.

You cannot claim a deduction for an expense if:

• someone else paid the expense, or you were, or will be reimbursed for the expense, or
• the payment or reimbursement is a fringe benefit (including an exempt benefit).

If you were partially reimbursed for the expense, you can only claim the part that was not reimbursed.

For more information see Deductions you can claim.

Allowances

If an allowance you received is shown on your tax return (in your payment summary details), you may be able to claim a deduction for your expenses covered by the allowance. You must have incurred the expenses in producing your employment income, and must meet the basic rules discussed above. For example, if you received a tools allowance of $500 and your tool expenses were $300, the whole amount of the allowance is included with your payment summary details on your tax return and you claim a deduction of $300 at Other work related expenses.

Decline in value of a depreciating asset

You may be able to claim a deduction for the decline in value of a depreciating asset you held during 2016–17 if you used it to produce income that you show on your tax return.

Depreciating assets include items such as tools, reference books, computers and office furniture.

You may be able to claim an immediate deduction for the full cost of depreciating assets costing $300 or less. You can use the Depreciation and capital allowance tool at the relevant deductions section to work out your deduction if the cost is not fully deductible.

Advance expenditure

If you have prepaid an amount for a service costing $1,000 or more, and the service extends for a period of more than 12 months or beyond 30 June 2018 (such as a subscription to a journal relating to your profession), you can claim only the portion that relates to 2016–17. You can also claim the proportion of your pre-paid expenses from a previous year that relate to 2016–17.

For more information, see Deductions for prepaid expenses.

Record keeping for work-related expenses

You must be able to substantiate your claims for deductions with written evidence if the total amount of deductions you are claiming is greater than $300. The records you keep must prove the total amount, not just the amount over $300. The $300 does not include car and meal allowance, award transport payments allowance and travel allowance expenses. There are special written evidence rules for these claims which are explained at the relevant sections.

If the total amount you are claiming is $300 or less, you need to be able to show how you worked out your claims, but you do not need written evidence.

Instructions on completing your individual tax return using myTax.