Tax myths busted, part 1

Wangaratta Chronicle - North East Regional Extra - - NEWS -

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.

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