Tax Time Toolkit 2019 - ATO
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2019 Tax Time Toolkit Real estate NAT 75055-06.2019 DE-5324
The 2019 Tax Time Toolkit We encourage you to share this information with your staff, clients, members and networks. Welcome to the Tax Time Toolkit for 2019! Once again deductions are a focus of We received great feedback on this the toolkit and we are committed to working product last year so we are excited to with agents and the community to help provide you with an updated version. people get their claims right. Small incorrect deductions have a big impact. In 2014–15, This toolkit has been designed to give you we estimate $8.76 billion was lost (from and your clients the information needed to individuals not in business), mostly due to lodge correctly this year. It has tips on how to incorrect deductions and omitted income. avoid common mistakes for real estate agents as well as ‘ready to use’ messages you can Thank you for your support and working adapt for your own communication channels with us to help the community get their and much more. tax right this tax time. You’ll also find practical and tailored Alison Lendon information about: Deputy Commissioner ■■ income that needs to be declared Australian Taxation Office ■■ claiming gifts and donations ■■ keeping the right records.
A helpful directory for tax time The ATO has a range of information, tools and services available to help Australians prepare and lodge their tax return every year: ■■ ato.gov.au/whatsnew – changes to ■■ ato.gov.au/calculators – a range of be aware of before you complete your popular calculators and tools to help you tax return work out the answers to questions unique ■■ ato.gov.au/doineedtolodge – an easy to your tax and super circumstances tool to find out if you need to lodge a ■■ ato.gov.au/whereismyrefund – track the tax return this year progress of your return ■■ ato.gov.au/lodgemyreturn – lodge using ■■ ato.gov.au/onlineservices – access myTax or a registered tax agent. If you are a range of tax and super services in one going to lodge your own return, myTax is place, including lodging your tax return, the quickest and easiest way to lodge tracking the progress of your return and ■■ ato.gov.au/deductions – it pays to know making a payment or entering a payment what you can claim at tax time arrangement ■■ ato.gov.au/occupations – guides from ■■ ato.gov.au/community – ask your specific industries and occupations to help tax and super related questions over on you correctly claim the work-related the ATO’s online community forum expenses you are entitled to ■■ ato.gov.au/findus – keep up to date ■■ ato.gov.au/mydeductions – a useful way with the latest tax and super information to keep track of records throughout the on the go! Follow the ATO to get tax tips year to make tax time easier and updates in seconds, share information and stay informed. ■■ ato.gov.au/incomeyoumustdeclare – find out what income you must declare in your tax return ■■ ato.gov.au/rental – find out what you need to declare and what you can claim for your investment property
Occupation guides The following page contains an occupation guides for real estate professionals. ■■ Office worker ■■ Real estate professional
If you’re an office worker it pays to learn what you can claim at tax time TAXI To claim a deduction ■■ you must have spent the money yourself and You can only claim the work-related part Travel expenses for work- weren’t reimbursed of expenses. You can’t ■■ it must be directly related claim a deduction related for any part of the You can claim a deduction for travel expenses if you are required to earning your income expenses expense that relates to travel overnight and don’t attend your usual work location – ■■ you must have a record to personal use. eg travelling to a remote office, provided the cost was incurred to prove it.* while carrying out your work duties. This could include meals, * You can use the ATO app myDeductions tool to keep track accommodation, fares and incidental expenses that you incurred of your expenses and receipts throughout the year. and your employer has not provided or reimbursed you. Receiving a travel allowance from your employer does not automatically entitle you to a deduction. You still need to show that you were away overnight, you spent the money yourself, and Car expenses the travel was directly related to earning your income. You can claim a deduction when you: ■■ drive between separate jobs on the same day – eg from Home office expenses your office job to a second job as a musician ■■ driveto and from an alternate workplace for the same employer on the same day – eg travelling to a different You can claim a percentage of the running costs of your home office to attend a meeting for the same employer. office if you have to work from home, including depreciation of office equipment, work-related phone calls and internet access You generally can’t claim the cost of trips between home and charges, and electricity for heating, cooling and lighting costs. work, even if you live a long way from your usual workplace or have to work outside normal business hours – eg having to work If you keep a diary of your home office usage, you can calculate late to speak to a colleague in a different time zone. your claim quickly using the home office expenses calculator. There are limited circumstances where you can claim the cost of You generally can’t claim the cost of rates, mortgage interest, trips between home and work, such as where you carry bulky rent and insurance. tools or equipment for work – eg large heavy filing boxes full of records you need for a particular meeting. The cost of these trips is deductible only if: ■■ youremployer requires you to transport the equipment Clothing expenses for work ■■ the equipment was essential to earning your income You can claim a deduction for the cost of buying, hiring, ■■ therewas no secure area to store the equipment at the mending or cleaning certain uniforms that are unique and work location, and distinctive to your job – eg clothing items you’re required to wear which have a logo that is unique and distinctive to your employer – ■■ the equipment is bulky – at least 20kg or cumbersome or protective clothing that your employer requires you to wear. to transport. You can’t claim a deduction for the cost of buying or cleaning If you claim car expenses, you need to keep a logbook to plain clothing worn at work, even if your employer tells you to wear determine the work-related percentage, or be able to demonstrate it, and even if you only wear it for work, eg a business suit. to the ATO a reasonable calculation if you use the cents per kilometre method to claim. Other common deductible Self-education expenses work-related expenses You can claim a deduction for self-education expenses if your As long as the expense relates to your Carrier 12:34 PM 100% course relates directly to your current job, eg human resource employment, you can claim a deduction Add expense training for a manager. for the cost of seminars and conferences, SNAP! SNAP!! SAVE STORE technical or professional publications, SAVE! STORE Cost You can’t claim a deduction if your study is only related in union and professional association fees. $45.00 Date 10/04/2018 a general way or is designed to help get you a new job, Description Travel expenses NAT 75027-05.2018 C127-00003f eg a health and wellbeing course. Is this partly a private cost? Yes No What can you claim on your tax return? 100% OR $0.00 Car Other car expenses This is a general summary only. For more information, go to ato.gov.au/occupations
If you’re a real estate professional, it pays to learn what you can claim at tax time To claim a deduction ■■ you must have spent the money yourself and You can only claim the work-related part Clothing and grooming expenses for work- weren’t reimbursed of expenses. You can’t ■■ it must be directly related claim a deduction related for any part of the You can claim a deduction for the cost of buying, hiring, to earning your income expenses expense that relates mending or cleaning certain uniforms that are unique and ■■ you must have a record to personal use. distinctive to your job eg clothing items you’re required to wear to prove it.* which have a logo that is unique and distinctive to your employer. * You can use the ATO app myDeductions tool to keep track You can’t claim a deduction for the cost of buying or cleaning plain of your expenses and receipts throughout the year. clothing worn at work, even if your employer tells you to wear it and even if you only wear it for work, eg black pants and a white shirt. You can’t claim a deduction for hairdressing, cosmetics, hair Car expenses and skin care products, even if your employer tells you to use them, or you are required to be well-groomed. You can claim a deduction when you: ■■ drive between separate jobs on the same day – eg travelling from your real estate agency to your second job as a waiter Home office expenses ■■ drive to and from an alternate workplace for the same employer on the same day – eg travelling between two different You can claim a percentage of the running costs of your home residential open homes. office if you have to work from home, including depreciation of You generally can’t claim the cost of trips between home office equipment, work-related phone calls and internet access and work, even if you live a long way from your usual workplace charges, and electricity for heating, cooling and lighting costs. or have to work outside normal business hours – eg to attend a If you are required to purchase equipment for your work and it weekend auction. costs more than $300, you can claim a deduction for this cost There are limited circumstances where you can claim the cost of spread over a number of years (depreciation). trips between home and work, such as where you carry bulky You generally can’t claim the cost of rates, mortgage interest, tools or equipment for work – eg a large 'for sale' sign and tools to rent and insurance. erect it. The cost of these trips is deductible only if: ■■ your employer requires you to transport the equipment for work ■■ the equipment was essential to earning your income ■■ there was no secure area to store the equipment at the work Other common deductible location, and work-related expenses ■■ the equipment is bulky – at least 20kg or cumbersome to transport. If you claim car expenses, you need to keep a logbook Other expenses you can claim a deduction for include: to determine the work-related percentage, or be able to ■■ marketing equipment – eg the work-related portion of cameras demonstrate to the ATO a reasonable calculation if you use used for property photos the cents per kilometre method to claim. ■■ decorating properties – eg flowers ■■ renewing your annual Certificate of Registration TAXI ■■ union and professional association fees Travel expenses ■■ technical or professional publications. You can claim a deduction for travel expenses if you have Gifts TO: to travel overnight from your usual work location – eg traveling to a remote area to inspect a property – provided the cost was incurred while carrying out your work duties. Travel expenses may You can claim a deduction for the cost of gifts – eg alcohol, include meals and accommodation, fares, petrol and incidentals flowers – bought for work purposes if you are a salesperson such as parking fees and tolls. or property manager entitled to receive your income from commission or both commission and retainer. Receiving a travel allowance from your employer does not automatically entitle you to a deduction. You still need to show You can’t claim a deduction if you earn a fixed income and that you were away overnight, you spent the money yourself, you are not entitled to earn a commission. and the travel was directly related to earning your income – You can’t claim a deduction for gifts that are in the form eg it was not a personal expense. NAT 75032-05.2018 C096-00004 of entertainment – eg a live sporting event. This is a general summary only. For more information, go to ato.gov.au/occupations
Information about common deductions, including record keeping The following pages contain guides for common deductions. ■■ Car expenses – what’s under the bonnet? ■■ Clothing and laundry – it pays to learn what you can claim at tax time ■■ Employees working from home – the other kind of housework ■■ Gifts and donations ■■ Record keeping – set the record straight ■■ Self-education expenses – it pays to learn what you can claim at tax time ■■ Travel expenses – what you need to know before you go
Car expenses What’s under the bonnet? If you use your own car for work purposes, you can claim a deduction using the cents per kilometre method or logbook method. If you use someone else’s car for work purposes, you can only claim for direct costs you pay for – such as fuel. You can claim a deduction for car expenses if: Remember you use your car in the course of you travel from your home to an You can’t claim a deduction performing your work duties alternative workplace and then for normal daily journeys between to your normal workplace home and work except in limited you attend work-related conferences you perform itinerant work. circumstances where you carry or meetings away from your bulky tools or equipment (such as normal workplace an extension ladder or cello) that: you travel directly between two your employer requires you to separate places of employment and use for work one of the places is not your home you cannot leave at work. you travel from your normal workplace If travel is partly private, you can to an alternative workplace and back only claim the work-related portion. to your normal workplace You can’t claim a deduction for car expenses that have been salary sacrificed. You can’t claim a deduction if you have been reimbursed for it. You can calculate your car expenses in two ways You can claim fuel and oil costs based on your actual receipts or you can estimate the expenses based on odometer records that show readings Cents per kilometre method Logbook method from the start and the end of the period You can claim a maximum of 5,000 Your claim is based on the business- you used the car during the year. business kilometres per car, using use percentage of expenses for the You need written evidence for all this method. car. other expenses for the car. Your claim is based on 68 cents Expenses include running costs Your vehicle is not considered a car per kilometre. and decline in value. You can’t claim if it is a motorcycle or a vehicle with a You don’t need written evidence but capital costs, such as the purchase carrying capacity of: you need to be able to show how you price of your car, the principal on any money borrowed to buy it and any one tonne or more, such as a worked out your business kilometres improvement costs (eg, adding paint utility truck or panel van (for example, by producing diary records of work-related trips). protection and tinted windows). nine passengers or more, To work out your business-use such as a minivan. percentage, you need a logbook Keep receipts for your actual expenses. and the odometer readings for the You cannot use the cents per kilometre logbook period. The logbook period method for these vehicles. While it is is a minimum continuous period not a requirement to keep a logbook, of 12 weeks. it is the easiest way to show how you have calculated your work-related use of the vehicle.
Keeping a logbook Your logbook must cover at least 12 continuous weeks. If you started using your car for work-related purposes less than 12 weeks before the end of the year, you can extend the 12-week period into the next financial year. If you are using the logbook method for two or more cars, keep a logbook for each car and make sure they cover the same period. Your 12 week logbook is valid for 5 years. However, if your circumstances change (eg, you change jobs) and the logbook is no longer representative, you will need to complete a new 12 week logbook. Your logbook can be electronic or paper. The example below has the details you need to keep. Car details Make: Holden Model: Barina Engine capacity: 2.4L Registration number: ABC 123 Odometer Odometer Total Journey reading at start Journey reading at end kilometres start date of journey end date of journey Reason for the journey travelled 27 August 2017 10,200km 27 August 2017 10,210km Private – take kids to school 10km 27 August 2017 10,210km 27 August 2017 10,230km Private – travel to work 20km 27 August 2017 10,230km 27 August 2017 10,245km Business – travel to offsite client meeting 15km 27 August 2017 10,245km 27 August 2017 10,260km Business – return to office 15km 27 August 2017 10,260km 27 August 2017 10,280km Private – travel from office to home 20km Calculate your work-related car use (Complete this section after 12 continuous weeks of logbook use) Logbook period (dd/mm/yy to dd/mm/yy) 01/09/17 to 21/11/17 a) Calculate the total number of kilometres travelled during the logbook period: 4,200km b) Calculate the number of kilometres you travelled in the course of earning your income during the logbook period: 1,470km c) Calculate the work-related use by dividing the amount at (b) by the amount at (a). Multiply this figure by 100. Your business use percentage is: 35% Once you’ve calculated your business use percentage, multiply it by your car expenses to figure out your claim. Car expenses can include running costs such as fuel, oil, and servicing, registration, insurance and vehicle depreciation. You can claim fuel and oil costs based on receipts or you can estimate the expenses based on odometer records that show readings from the start and end of the period you used the car during the year. You need written evidence for all other expenses for the car. The ATO app’s myDeductions tool can be used to record work-related car trips as well as any car expenses. You can share your myDeductions records directly with your agent at tax time. For more information, visit ato.gov.au/mydeductions. NAT 74998-06.2019 DE5998 For more information, speak with your tax agent or visit ato.gov.au/carexpenses
Clothing and laundry It pays to learn what you can claim at tax time You can claim a deduction for the cost of buying and cleaning: You can’t claim a deduction for the cost of occupation-specific clothing, protective clothing and purchasing or cleaning clothes you bought to wear unique, distinctive uniforms. for work that are not specific to your occupation, You can claim a deduction for occupation-specific such as black trousers and a white shirt, or a suit, clothing. This means it is specific to your occupation, even if your employer says this is compulsory. is not everyday in nature and allows the public to These items are conventional, not usually a easily recognise your occupation. specific type and not sufficiently distinctive or An example is the checked pants a chef wears. unique to your employer. You can claim a deduction for protective clothing and You can’t claim a deduction for ordinary clothes footwear you wear to protect yourself from the risk of illness (such as jeans, drill shirts, shorts, trousers, socks or injury posed by the activities you undertake to earn your or closed shoes) as they lack protective qualities income. The clothing must provide a sufficient degree of designed for the risks of your work. protection against that risk. Examples include: fire-resistant and sun-protection clothing hi-vis safety vests non-slip nurse’s shoes steel-capped boots overalls, smocks and aprons you wear to protect your ordinary clothes from soiling or damage. You can claim a deduction for a compulsory or non-compulsory uniform that is unique and distinctive to the organisation you work for. Clothing is: unique if it has been designed and made only for the employer distinctive if it has the employer's logo permanently attached and the clothing is not available to the public. A compulsory work uniform is a set of clothing that identifies A non-compulsory uniform is a set of clothing and you as an employee of an organisation with a strictly enforced accessory items (not protective or occupation-specific) that: policy that makes it compulsory for you to wear the uniform distinctly identifies a particular employer, product or service while you're at work. is not compulsory for employees to wear to work. You can claim a deduction for shoes, socks and stockings You can only claim expenses incurred for a where they are an essential part of a distinctive, compulsory non-compulsory work uniform if your employer uniform, and where their characteristics (colour, style and has registered the design with AusIndustry. type) are specified in your Shoes, socks and stockings can never form employer's uniform policy. part of a non-compulsory work uniform. You can claim a deduction You can’t claim a deduction for a single item for a single item of distinctive of non-compulsory uniform, such as a jumper. clothing, such as a jumper, if it's compulsory for you to wear it at work.
Situation Clothing Laundry Reason deductible deductible Your employer tells you to wear plain Conventional clothing that is not distinctive black pants and a black polo shirt to your employer Your employer tells you to wear Top Top plain black pants and supplies a You are required to wear the top and it is unique and top with a logo that is unique and distinctive to the organisation you work for distinctive to your employer Pants Black pants are everyday in nature and not sufficiently distinctive or unique to your employer – a colour requirement is not enough Your employer tells you to purchase Top Top Top and wear a specific top with a logo You are required to purchase the top and it is unique on it and plain black pants Pants Pants and distinctive to the organisation you work for Pants Black pants are everyday in nature and not sufficiently distinctive or unique to your employer – a colour requirement is not enough Your employer tells you to purchase Top Top Top and wear a specific top with a logo You are required to purchase the top and the logo makes on it and black pants from XYZ Pants Pants it unique and distinctive to the organisation you work for retail outlet Pants Black pants without a logo or other feature are not unique and distinctive to the organisation you work for, even if your employer requires you to purchase them You are required to purchase You are required to purchase a registered uniform that a uniform of a certain style is sufficiently distinctive and unique to your employer and colour that your employer registers, made up of a shirt with a logo and black pants Your employer tells you to You cannot claim for the cost of plain clothing you wear purchase and wear the latest line of at work, even if it’s clothing sold at the store you work clothes from the store you work at at and your employer requires you to wear it Records Allowances You must have written evidence, such as diary entries (to If you receive an allowance from your employer for be kept for a representative period of at least one month) and laundry expenses: receipts, for your laundry expenses if both of the following apply: you can only claim a deduction for the amount you The amount of your claim is greater than $150. actually spent, not simply the amount of your allowance Your total claim for work-related expenses exceeds $300. the allowance is assessable income, which you must include on your tax return. If you don’t need to provide written evidence for your laundry expenses, you may use a reasonable basis to work out your claim. If you wash, dry and iron your clothes yourself, we consider that a reasonable basis for working out your laundry (washing, drying and ironing) claim is: $1 per load if the load is made up only of work-related clothing 50 cents per load if you include other laundry items in the load. n74999-03.2018 For more information, speak with your tax agent or visit ato.gov.au/clothingandlaundry c079-00003
Employees working from home The other kind of housework If you’re an employee who regularly works from home, you may be able to claim a deduction for expenses relating to that work. Running expenses Occupancy expenses Phone and internet Employees who work from home can claim As an employee, generally you can’t claim expenses the work-related proportion of their running a deduction for occupancy expenses, If you use your phone or internet for expenses. These expenses are the cost of which include rent, mortgage interest, work, you can claim a deduction for the using equipment and utilities at your home property insurance, land taxes and rates. work-related percentage of your expenses for work and include: For more information, see ato.gov.au/ if you paid for these costs and have records lighting occupancyexpenses. to support your claims. heating and cooling You need to keep records for a four-week cleaning representative period in each income year to claim a deduction of more than $50. the decline in value of equipment, These records include phone bills (paper furniture and furnishings in the area or electronic) from which you can identify you use for work work-related calls. Diary entries and the cost of repairs to this equipment, evidence that your employer expects you to furniture and furnishings, and work at home or make some work-related other running expenses including calls will also help you demonstrate that you computer consumables (such as printer are entitled to a deduction. paper, ink) and stationery. Calculating running expenses There are two ways to calculate your running expenses: you can claim a fixed rate of 52 cents per hour, or you can calculate your actual expenses. Fixed rate Actual expenses You can use a fixed rate of 52 cents To calculate actual expenses if you have If you did not have a dedicated work per hour for each hour that you work from a dedicated work area, you: area, the additional expense for lighting, home. This method incorporates all the record the total expenses for lighting, heating, cooling and electricity should be items you are able to claim, including the cleaning, heating, cooling and electricity calculated by determining the actual cost of decline in value of office furniture and for any depreciating assets used for your running each unit you used per hour and furnishings (such as desk and chair). home for the year multiplying that by the hours you spent You can keep a diary that documents your working at home. Generally, the amount of work out the floor area of the part of your pattern of office use for a minimum of four additional expense will be small. This will be home that you use for work as a weeks in a financial year. The diary should particularly so where other people are using percentage of the total floor area outline the actual hours you spent working the area at the same time you are working work out the percentage of the year you there. In those circumstances there will be at home. You can then apply this amount used that part of your home exclusively no additional cost for lighting, heating or of use across the remainder of the year for work – eg if you used it for work for cooling (see the scenario below). to determine your full claim. six months during the year, the You can calculate your deductions for percentage would be 50% (note: in decline in value by working out the amount working this out you must also take into of depreciation for each item for the year, account the use of that area by other and claiming the proportion of the amount members of your household if which reflects your work-related use. The applicable). Apply this percentage to ATO has a depreciation tool to help you your calculation above to determine work this out, at ato.gov.au/depreciationtool the amount you can claim.
Calculating phone and internet expenses There are two ways to calculate your phone and internet expenses: you can claim up to $50 with limited documentation, or you can calculate your actual expenses. Claiming up to $50 Actual expenses If your work use is incidental and you are If you have a phone or internet plan where the amount of data downloaded for not claiming a deduction of more than $50 you receive an itemised bill, you need to work purposes as a percentage of your in total, you may make a claim based on determine your percentage of work use total downloads. the following, without having to analyse over a four-week representative period If you have a bundled or non-itemised your bills: which can then be applied to the full year. plan, you need to identify your work use $0.25 for work calls made from You need to work out the percentage for each service over a four-week your landline using a reasonable basis. This could representative period during the income $0.75 for work calls made from include: year, which can then be applied to the your mobile the number of work calls made full year. $0.10 for text messages sent from as a percentage of total calls For more information, see your mobile. the amount of time spent on work calls ato.gov.au/phoneandinternet as a percentage of your total calls Common scenarios Julia – A dedicated room for work James – no set work area Natalie – chooses to work from home Julia is a lawyer who works as an employee James is a high school teacher. From time Natalie is a web developer for a large for a large city firm. Julia’s employer has to time, James works in the lounge room at company and usually works from their office agreed that she can work from home two home – for example, to mark tests and in her city. While Natalie is not required to days per week. She has a home office that prepare end of term reports. He does not work from home, her employer supports it. she works in on the days she does not have a room set aside exclusively for work. Natalie is not provided with the work travel to the city. Julia and members of her James can only claim running costs equipment to use at home, so she uses her family use the home office for private associated with the work he does at own laptop, internet connection, mobile purposes, including personal use of the home – such as the work-related phone and thumb drive. She is not computer and to store household items. proportion of the decline in value of the reimbursed by her employer for these Julia can claim running costs, but only laptop he uses to prepare the reports costs. the portion of the expenses that relate to and the additional cost of lighting, Natalie is entitled to claim running costs her work-related use of the home office. heating and cooling his lounge room. He including the work-related proportion of In working out her work-related use of is also entitled to claim the cost of the decline in value on her laptop, her the home office and the computer, Julia electricity to power his laptop for the office desk and chair, and a percentage must take into account not only her own hours he spends working at home. of lighting, heating and cooling that private use but also her family’s use of If James’ family was in the lounge room reflects her work-related use of the the home office and the computer. watching television at the same time that office, as well as the cost of using her he was in there marking tests and own internet connection and mobile preparing end of term reports, he could phone for work. Natalie needs to only claim the cost of electricity required apportion these expenses to take her to power his laptop for the time he spent private use into account. working as that is the only additional cost he incurs as a result of working from home. Records you must keep Carrier 12:34 PM Add expense 100% You must keep records of your expenses, such as: SNAP!! SAVE receipts or other written evidence, including for depreciating assets you have purchased SNAP!! STORE SAVE NAT 75012-03.2019 DE-1647 diary entries to record your small expenses ($10 or less) totalling no more than $200, STORE Cost $45.00 Date or expenses you cannot get any kind of evidence for 10/04/2018 Description Travel expenses itemised phone accounts from which you can identify work-related calls, or other records, such as diary entries, if you do not get an itemised bill. Is this partly a private cost? Yes No What can you claim on your tax return? 100% OR $0.00 Car Other car expenses This is a general summary only. For more information, speak with your tax agent or visit ato.gov.au/workingfromhome
Gifts and donations When can I claim? You can claim a deduction for a donation you make to an organisation if the donation meets four conditions: You make it to a deductible gift recipient (DGR) It must truly be a donation. A donation is a voluntary transfer of money or property where you receive no material benefit or advantage* It must be money or property, which includes financial assets such as shares You have a record of the donation (eg a receipt). * If you receive a material benefit – that is if the donor receives something which has a monetary value from the DGR in return for their donation – it is considered a contribution, and extra conditions apply. Visit ato.gov.au/gift-or-contribution for more information. What is a DGR? What records Bucket donations A deductible gift recipient (DGR) is an do I need? If you made one or more donations You should keep records of all tax of $2 or more to bucket collections organisation or fund that can receive tax deductible gifts and contributions you conducted by an approved deductible gifts. make. organisation for natural disaster Not all charities are DGRs. For example, victims, you can claim a tax deduction in recent times there has been an influx of When you make a donation, the DGR will of up to $10 for the total of those crowdfunding campaigns. Many of these usually issue you with a receipt – but they contributions without a receipt. crowdfunding websites are not run by don’t have to. If this is the case, in some Further information is available DGRs. circumstances, you can still claim a tax on the ATO website. deduction by using other records, such as You can check whether your donation bank statements. was made to an endorsed DGR on the Australian Business Register website If a DGR issues a receipt for a deductible abn.business.gov.au/DgrListing.aspx. gift, the receipt must state: the name of the fund, authority or institution to which the donation has been made the DGR’s ABN (if any – some DGRs listed by name might not have an ABN) that the receipt is for a gift. If you give through a workplace giving program your payment summary or a written record from your employer is sufficient evidence.
When you can and Gifts and donations to can’t claim a deduction political parties and independent You may be able to claim a deduction when: candidates and members the gift or donation is $2 or more and you have a record of the donation In some circumstances, your gifts and donations to registered political parties and independent candidates may be claimed you donate property or shares, however special rules as a deduction. apply (see ato.gov.au/gifts-and-fundraising-rules) there are special circumstances under the Heritage Your gift or donation must be $2 or more and be money or and Cultural gift programs where donations can also property that you purchased during the 12 months before be deductible (see ato.gov.au/cultural-gifts making the donation. This includes if you pay a membership for more detail). subscription to a registered political party. You must also make the gift or donation as an individual, not in the course of carrying You can’t claim gifts or donations as a deduction when on a business, and it can’t be a testamentary donation. it is for: the purchase of raffle or art union tickets (eg RSL Art The most you can claim in an income year is: Union Prize home) $1,500 for contributions and gifts to political parties, and the purchase of fundraising items such as chocolates, badges and pens $1,500 for contributions and gifts to independent candidates Carrier 12:34 PM 100% the cost of attending fundraising dinners, even if the cost Add expense and members. exceeds the value of the dinner SNAP! SAVE! payments to school building funds made, for example, as To claim a deduction you must SNAP!! STORE an alternative to an increase in school fees keep a written record of your SAVE STORE Cost gifts to families and friends regardless of the reason donation. $45.00 Date 10/04/2018 donations made under a salary sacrifice arrangement To find out who is registered, Description Donation donations made under a will. go to: ato.gov.au/political-gifts. Is this partly a private cost? Yes No What can you claim on your tax return? 100% OR $0.00 Car Other car expenses NAT75017-05.2018 C069-00003 This is a general summary only. For more information, speak with your tax agent or visit ato.gov.au/gifts-and-donations
Set the record straight To claim a deduction for work-related expenses: you must have spent the money yourself and weren't reimbursed it must be directly related to earning your income you must have a record to prove it. You can only claim the work-related part of expenses. If an expense relates to both work and personal use, you must apportion use on a reasonable basis and only claim the work-related portion. Records Keeping you need to keep your records myDeductions If you claim work-related deductions You need to keep your records for The records you keep don’t have you must have records or be able to five years from the date you lodge to be in paper form. Records show how you calculated your claims. your tax return. made and stored electronically are Records are usually a receipt from the If you are claiming for the cost of a recognised as documents – this supplier of the goods or services. depreciating asset that you have includes photos of your receipts. The receipt must show the: used for work – eg a laptop – you Keeping track of your records on must keep purchase receipts and the go is easy with the ATO app name of supplier a depreciation schedule, or details myDeductions tool. amount of expense of how you calculated your claim In myDeductions you can keep nature of goods or services for decline in value, for five years records of: date the expense was paid following your final claim. date of the document. any work-related expenses As we may ask that you produce (including car trips) your records during the five years, interest and dividend deductions Record keeping it is important that you have sufficient exceptions evidence to support your claims. gifts or donations In some instances you may cost of managing tax affairs not need receipts, but you will Commissioner’s other deductions. still need to be able to show you discretion Then, at tax time, you can import the spent the money and how you If you are unable to obtain a receipt records into myTax or send them to calculated your claim. from a supplier, you can still claim a your agent. deduction if we are satisfied that the Exceptions to the record nature and quality of the evidence keeping rules are there to make shows that you: Download the app now – things simpler – they do not allow you to claim an automatic spent the money it’s free from your app store. deduction up to the specified are entitled to claim a deduction. For more information, amount where the money has Evidence can include bank statements visit ato.gov.au/mydeductions not been spent. or credit card statements which show the amount that was paid, and when For more information, and who it was paid to, as well as other speak with your tax agent or visit documents which outline the nature of ato.gov.au/keepingrecords the goods or services provided. Representative If you paid cash to a supplier periods and have no other documentation If your usual pattern of work use to support your claim, you will changes during the year, you may not have sufficient evidence to need to complete a new record. For claim a deduction. example, if you change job and the work use of your internet changes you need to complete a new diary.
How the record keeping rules apply to different expenses Car expenses Travel expenses The type of car expense records you need to keep depends on whether you use There are specific record keeping the cents per kilometre method or logbook method to calculate your claim. requirements for travel expenses, depending on: Method 1: Cents per kilometre whether your travel allowance is You don’t need receipts but you need to be able to show how you worked out your shown on your payment summary business kilometres (for example, by producing diary records of your work-related trips). whether your travel was domestic If you use the cents per kilometre method, your claim is based on a set rate or overseas (68c per kilometre from 1 July 2018) for each business kilometre travelled. You can claim a maximum of 5,000 kilometres per car. the length of your travel and your occupation. Travel records you should keep If you borrowed a car or used a vehicle other than a car (for example, a motor include: cycle or a vehicle with a carrying capacity over one tonne, such as a utility truck a travel diary or itinerary, if your or panel van) you cannot claim your expenses using either of the two methods. travel was for six nights or more Instead, you need to keep all your receipts (such as fuel and repairs), and claim receipts for all meals, airfares, the work-related portion of these costs as a travel expense, not a car expense. accommodation, car parking and tolls Method 2: Logbook an explanation of how the travel was work related, the number of Your claim must be based on the percentage of work use of your car. To work this out nights you slept away from home you need to keep a logbook. and the location. Your logbook must: If your travel allowance is shown on cover a minimum continuous period of 12 weeks and be broadly representative your payment summary and you want of your travel throughout the year to make a claim against it, you must include the purpose of every journey, odometer reading at the start and end have written evidence for the whole of each journey and total kilometres travelled during the period amount, not just the excess over the include odometer readings at the start and end of each income year. reasonable amount Your logbook is valid for five years, but you can start a new logbook at any time. If the work use of your car changes, you need to complete a new log book. Reasonable amounts for You can claim fuel and oil costs based on your actual receipts, or you can estimate accommodation, meals and the expenses based on odometer readings from the start and the end of the period incidentals are provided to make in which you used the car during the year. record keeping simpler, not to provide an automatic deduction You must keep: – you can only claim the original receipts for all other expenses for the car amount you spent. details of how you calculated your claim for decline in value for your car, Although you may not need including the effective life and the method used. records, you will still need If your claim relates to the transport of bulky tools and equipment, you will need: to show how you calculated a record of all work items carried your claim. the weight and size of all work items For more information, evidence that the items carried are essential to your work visit ato.gov.au/travelexpenses evidence that your employer provided no secure storage at the workplace. Remember to include on your tax return any allowances that you receive from your employer for car expenses. For more information visit ato.gov.au/carexpenses Clothing, laundry and dry-cleaning expenses If your laundry claim is Clothing under $150, you do not need You need to keep receipts to claim for the purchase of occupation-specific clothing, to keep records. protective clothing, or unique and distinctive uniforms. Although you may not need records, you will still need to Laundry be able to explain how you To claim a deduction for laundering occupation-specific clothing, protective clothing or unique calculated your claim. and distinctive uniforms, you must keep details of how you calculated your claim. Dry-cleaning For more information, If you use a dry-cleaning service for the clothes, you need to keep receipts. visit ato.gov.au/clothingandlaundry
How the record keeping rules apply to different expenses (continued) Phone and internet Claiming $50 or less Claiming more than $50 Bundled plans If the work use of your phone is incidental, To claim a deduction of more than If you have a bundled plan, you can keep and you are not claiming a deduction of $50 you must: a diary covering a representative four-week more than $50, you may make a claim keep all your phone and internet period showing how often you use each based on the following: bills for the year service for work. This pattern of work use can $0.25 for each work call made then be applied to the full working period. show how much is related to work. from your landline To determine your work use you can record: $0.75 for each work call made If your bills are itemised internet from your mobile Highlight all your work-related calls in a – the time you spent, or data used for $0.10 for each text message sent representative four-week period which can work purposes compared to your from your mobile. then be applied to the full period. private usage and that of all members of your household. phone – the number of work calls made as Unless you only use your phone a percentage of total calls and internet for work, you will have to – the amount of time spent on work calls determine the work-related portion of as a percentage of your total calls. your expenses. Keep a record of the calculation and only claim that amount. For more information, visit ato.gov.au/phoneandinternet Working Self-education Specific records from home expenses required for When claiming running costs for your You must keep receipts for all self- depreciating assets home office (such as electricity and education expenses, including course Some items, like a computer or car, home office equipment) the types of fees, text books, stationery and travel have a limited life expectancy (effective records you need to keep depends on expenses. life) and are expected to depreciate the method you use to work out your You must also be able to explain over time or decline in value. claim – fixed rate or actual costs. how the course directly related to your You must keep receipts that show the: employment at the time of study. Fixed rate name of supplier If you are claiming the portion of If you are using the fixed rate method cost of the asset a depreciating asset that you have (52c per hour from 1 July 2018), either nature of the asset used for self-education – eg a laptop keep records of your actual hours date you acquired the asset – you must keep receipts and a spent working at home for the year, depreciation schedule, or details of date of the document. or keep a diary for a representative how you calculated your claim for You also need to be able to show: four-week period to show your usual decline in value. pattern of working at home. the date you first started using the For more information, asset for work-related purposes Actual costs visit ato.gov.au/selfeducation the effective life of the asset (how If you are claiming the actual costs long an asset can be used for). If you have incurred, keep your receipts you have not adopted the effective for items you will claim outright (for life determined by us, you will need example, receipts for stationery or to show how you worked out the statements for electricity and gas). effective life. For more information, the method used to work out the visit ato.gov.au/workingfromhome decline in value how you have calculated the percentage of work use. The depreciation and capital allowances tool on ato.gov.au will help you claim a decline in value deduction for a depreciating asset and assist DE-573 you with some of these record keeping requirements. NAT 75108-05.2019 For more information, visit ato.gov.au/declineinvalue
Self-education expenses It pays to learn what you can claim at tax time When can you claim? When can’t you claim? Self-education expenses are deductible You cannot claim a deduction for when the course you undertake has a self-education for a course that: sufficient connection: relates only in a general way to your to your current employment and current employment or profession, maintains or improves the specific or skills or knowledge you require in your will enable you to get new employment current employment, or – such as moving from employment as results in – or is likely to result in – an a nurse to employment as a doctor. increase in your income from your current employment. Course expenses If your self-education is eligible, you may You can only claim a deduction for the However, you cannot claim the cost of be able to claim a deduction for your portion of these expenses that is directly the last stage of your travel from: expenses directly related to undertaking related to your eligible self-education. home to your place of education, the course. Depreciating assets and then to work General expenses You may be able to claim a deduction work to your place of education, Some general expenses you may be able for depreciating assets – assets that lose and then to your home. to claim include: value over time such as computers and printers – that you have bought and use tuition fees, if paid directly by you to study. You cannot claim the computer consumables following expenses related to Depreciating assets that cost more than (eg printer cartridges) your self-education: $300 are usually claimed over the life of textbooks the asset (decline in value). However, if tuition fees paid by someone you have a depreciating asset that cost else, including your employer, or trade, professional or $300 or less – you can get a deduction for for which you were reimbursed academic journals the full cost of the asset to the extent that repayments of loans you stationery you used it for study in the tax year you obtained under the Higher home office running costs bought it. (see Apportioning expenses). Education Loan Program Car expenses (HELP) loans, Student Financial internet usage (excluding Supplement Scheme (SFSS), connection fees) If you are undertaking a course that the Student Startup Loan (SSL) phone calls has a direct connection to your current or the Trade Support Loans employment, you can also claim the Program (TSL) postage cost of daily travel from your: home office occupancy student services and amenities fees home to your place expenses – such as rent, travel costs, including car expenses, of education and back mortgage interest, rates between home and the place of work to your place accommodation and meals education and between your workplace of education – except if you travel away and the place of education and back. from home for a short period fees payable on some Higher for study, such as to attend Education Loan Program (HELP) residential school. loans, but not the loan itself.
Apportioning Recording expenses your expenses Calculating Some expenses need to be apportioned Use our self-education expense calculator your between private purposes and use for self- (ato.gov.au/selfeducationcalc) to get an expenses education. Travel costs and depreciating estimate of your self-education deductions. In certain circumstances, you may assets are good examples of expenses that It also provides information on your claim have to reduce your self-education may need to be apportioned. eligibility. expenses by up to $250 to work out Use of equipment Records you need to keep may include your deduction. receipts or other documents showing If you use equipment such as computers The Self-education expenses expenses such as: and printers both privately and for study, calculator (ato.gov.au/ you must apportion the expense based on course fees selfeducationcalc) on the ATO the percentage you use the equipment for website works this out for you. textbooks study. stationery For example, if a computer is used 50% of the time for study and 50% for private decline in value of, and repairs to, purposes, you can only claim half of the depreciating assets. Carrier 12:34 PM Add expense 100% cost of the computer as a deduction. (For You must also keep receipts, documents or SNAP!! more information on asset expenses, see SNAP!! SAVE STORE diary entries for travel expenses. SAVE the Depreciating assets section on the STORE Cost $45.00 previous page). The ATO app’s myDeductions tool Date 10/04/2018 (ato.gov.au/myDeductions) can be used Description Travel expenses to record your self-education expenses. Is this partly a private cost? Yes No What can you claim on your tax return? 100% OR $0.00 Car Other car expenses NAT 75044-05.2018 C137-49846 This is a general summary only. For more information, speak with your tax agent or visit ato.gov.au/selfeducation
Travel expenses What you need to know before you go Travel expenses include: Transport expenses are deductible when you travel in the course of performing your duties. This includes the cost of driving your car, flying, catching a train, taxi or bus. Accommodation, meals and incidental expenses are deductible when you travel in the course of performing your duties AND are required to be away from home overnight. Things to remember Examples of when you need to You need to keep receipts – or other apportion your expenses written evidence – for your travel You take your partner or children away with you when you travel for work. You expenses. There are some exceptions cannot claim the cost of any travel expenses you incur for them. For example, for expenses on accommodation, if you pay for a two bedroom apartment to accommodate your children, you meals and incidental expenses. can only claim a deduction for the cost you would have incurred on a one You need to apportion your expenses bedroom apartment had you travelled alone. if they are partly private in nature. If You fly to Perth for a seven day work conference and add on a return trip to you travel on a work trip, you may Broome for 4 days. You can only claim your flights to and from Perth. You not be required to apportion your can only claim the accommodation, meals and incidental expenses that you costs where there is a minor private incurred during the seven days of work-related travel. component that is merely incidental to the work. You are in the process of booking a holiday to Sydney to see an art exhibit when your employer asks if you’d like to attend a three day work-related If you travel away from home for six conference in Sydney which coincidently is to be held from the Monday or more nights in a row, you need to following your planned holiday. You change your travel arrangements to include keep travel records – such as a travel the additional time in Sydney. In total, you spend three days in Sydney for diary. This is in addition to keeping private purposes followed by three days at the conference. You must apportion receipts for your expenses. your flights for the private component of your trip (50%) and only claim the Receiving a travel allowance from accommodation, meals and incidental expenses you incur during the three your employer does not automatically days of work-related travel. entitle you to a deduction. You fly to London for a 10 day international, work-related conference. You stay If any travel expenses are reimbursed, over for an extra two days to do some sightseeing. While you cannot claim you cannot claim a deduction for them. the cost of accommodation and meals for the two days of private travel, the private component of the trip is merely incidental and so you can claim the full You generally can’t claim for normal cost of your airfares. daily trips between home and work – this is private travel. You are holidaying in Cairns when you become aware of a work-related seminar which runs for half a day. You can You can’t claim accommodation, claim the cost of attending the seminar, meals and incidental expenses you but you cannot claim your airfares to and incur in the course of relocating or from Cairns, or accommodation whilst living away from home. in Cairns, as the primary purpose of the travel is private.
TAXI Record keeping exception for Travel diary accommodation, meals and A travel diary is a record of your travel movements and activities incidental expenses you undertake during your travel. It will help you work out the work-related and private elements of your trip. You must always keep records of your expenses, however you don’t have to keep all your receipts if: You will need a travel diary for each trip you take away from home for six or more nights in a row. There are a couple of you received an allowance from your employer for the exceptions. expenses, and These are: your deduction is less than the Commissioner’s reasonable You travel within Australia and meet the requirements for the amount. To find this year’s amount, visit our legal database record keeping exception (shown left), or (ato.gov.au/law) or ‘ask Alex’ on ato.gov.au You are a crew member on an international flight and you If you claim a deduction for more than the Commissioner’s claim a deduction for less than the allowance you received. reasonable amount you need to keep receipts for all expenses, not just for the amount over the Commissioner’s reasonable You should record your movements and activities in whatever amount. diary/journal you use. It can be paper or electronic. It must be in English. Even if you are not required to keep receipts, you must be able to explain your claim and show you spent the amounts, eg show You must record your travel movements and activities before your work diary, that you received and correctly declared your they end, or as soon as possible afterwards. You need to state: travel allowance, and bank statements. where you were what you were doing the times the activities started and ended. This is an example of a travel diary, which is kept in addition to a log book for car expenses: October 2017 9 Monday 10 Tuesday 11 Wednesday 12 Thursday 6am travel to Wangaratta. 9:30am to 5:30pm sales 9:30am to 5:30pm sales 8am travel to Shepparton. Arrive 9am. conference Wangaratta. conference Wangaratta. Arrive 9:15am. 9:30am to 5:30pm sales Overnight conference Overnight conference 10am meet Mr Smith for conference Wangaratta. centre. centre. display meeting. Overnight conference 1pm to 5pm Shepparton centre. store review. Overnight Shepparton hotel. 13 Friday 14 Saturday 15 Sunday 6am travel to Echuca. 7am travel to Bendigo. 8am State Rep breakfast Carrier 12:34 PM 100% Arrive 7am. Arrive 8:30am. conference. Finish 10am. Add expense 8am to 12noon Echuca 9am to 6pm State Rep 10am travel home SNAP!! SAVE store review. meeting. to Melbourne. Arrive SNAP!! STORE 12:30pm to 12:45pm 6pm Dinner with State 12:30pm. SAVE STORE Cost drive to Moama store. Reps. $45.00 1pm to 5pm Moama store Overnight Bendigo Motor Date 10/04/2018 review. Inn. Description Travel expenses Overnight Moama hotel. Is this partly a private cost? Yes No NAT 75010-05.2018 C072-00002 What can you claim on your tax return? 100% OR $0.00 Car Other car expenses This is a general summary only. For more information, speak with your tax agent or visit ato.gov.au/travelexpenses
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