Legit work deductions you're missing out on
Going to work is an expensive business
Going to work can be an expensive business. It costs an average $179 a month ($2148 a year) for two-way travel and $129 a month ($1548 a year) for lunches, according to research by the insurance company ING Direct.
But if you're spending that money as part of your working day, you can claim a tax deduction, right? Sadly, that's almost always not the case.
Basics of claiming work-related deductions
The general rule is that if you spend something as part of earning your taxable income, you can claim a deduction for it. However, you're specifically prevented from making a tax claim for any expenses of a private or domestic nature.
The journey to work is regarded as private travel, because your working day doesn't actually start until you reach your workplace and then finishes when you leave at the end of the day. That means you can't claim a tax deduction for the daily commute, whether you drive or take public transport.
Similarly, your lunch is bought and consumed on your own time and is therefore a private expense; you would have to eat lunch whether you were working or not, so it can't be called a work-related expense.
Finally, you usually can't claim a deduction for buying and cleaning the clothes you wear to work because your clothing is regarded as a private expense. Even if you wouldn't normally wear a particular item of attire (like a business suit) outside the workplace, generally the connection to your work is too tenuous to make the expense tax deductible.
None of that gives grounds for optimism but the picture isn't entirely bleak. There are exceptions and it's worthwhile considering those in more detail.
The general prohibition against claiming a deduction for travel to your workplace is relaxed if you have to carry bulky tools as part of your job and you don't have anywhere secure to lock them away at work, requiring you to take them home. If you want to rely on that exemption and claim a tax deduction for your journey to and from work, you need to ensure you can prove that you really do need to carry your tools with you, since this is an area that is closely looked at by the tax office and many taxpayers are caught making false claims.
If you have a second job you can also claim a tax deduction for the journey from your first job to your second job, provided that you travel straight there (and don't go home first). Similarly, if you travel from your normal workplace to another workplace (for instance, to a client's premises for a meeting), that journey is claimable, as is any subsequent journey home from the alternative workplace.
Sadly, there really isn't any way around the prohibition on claiming your lunch.
Generally, to claim a tax deduction for meals consumed on work time you need to be either working overtime or travelling away from home overnight (or longer) for work purposes. In both cases, the tax office accepts that your normal access to meals is hindered by either working unfavourable hours or being away from home, and hence a deduction is available. For those of us who work a normal day, however, the tax office won't subsidise that lunchtime sandwich!
There are certain types of work-related clothing that are tax deductible:
- Compulsory uniforms. This is a set of clothing that identifies you as an employee of a particular organisation. It is compulsory for you to wear the uniform while you're at work and there is a strictly enforced policy ensuring that this happens. Such uniforms are therefore considered a work-related expense so the cost is deductible.
- Non-compulsory uniforms. You can claim for a non-compulsory uniform provided it is unique and distinctive to the organisation you work for. Clothing is unique if it has been designed and made only for your employer. Clothing is distinctive if it has your employer's logo permanently attached and the clothing is not available to the public. Non-compulsory work uniforms must usually have a design registered with AusIndustry to be tax deductible.
- Protective gear. You can claim a deduction for clothing and footwear that you wear to protect yourself from the risk of illness or injury posed by your job or the environment in which you do your job, including:
- fire-resistant and sun-protection clothing (including sunglasses);
- high-visibility vests;
- non-slip nurse's shoes;
- rubber boots for concreters;
- steel-capped boots, gloves, overalls and heavy-duty shirts and trousers;
- overalls, smocks and aprons you wear to avoid damage or soiling to your ordinary clothes while at work.
Finally, remember that if you can claim a tax deduction for buying the item of clothing, you can generally also claim a deduction for the cost of laundering or drycleaning it.