Tax myths busted, part 1
Myth: Everyone can automatically claim $150 for clothing and laundry, 5000 kilometres for car related expenses, or $300 for work-related expenses, even if they didn’t spend the money
Fact: the record-keeping exemptions provide relief from the need to keep receipts in certain circumstances. However, they are not an automatic entitlement or a “standard deduction” for everyone. While you don’t need receipts for claims under $300 for work related expenses, $150 for laundry and 5000 kilometres, you still must have spent the money, it must be related to earning your income, and you must be able to explain how you calculated your claim.
Myth: I don’t need a receipt, I can just use my bank or credit card statement
Fact: To claim a tax deduction you need to be able to show that you spent the money, what you spent it on, who the supplier was, and when the purchase occurred. Bank or credit card statements usually won’t contain this information.
Myth: I can claim makeup that contains sunscreen if I work outside
Fact: Cosmetics are usually a private expense and the addition of sun protection does not make it tax deductible. However, it may be deductible if the primary purpose of the product is sunscreen (ie: it has a high SPF rating), the cosmetic component is incidental, and you were required to wear it because you work outdoors.
Myth: I can claim my gym membership because I need to be fit for work.
Fact: While you might like to keep fit, there are only a very small number of people who can claim gym memberships, such as special operations in the Australian Defence Force.
Myth: I can claim all my travel expenses if I add a conference or a few days’ work to my holiday
Fact: If you decide to add a conference or some work to your holiday, or a holiday to your work trip, you must apportion the travel expenses between the private and work-related components.
NOT SO FAST: When claiming for travel, you must apportion travel expenses between work related and private commitments.