Tax tips for individuals - by Brian Hoult

What items can you claim when lodging your income tax return for the year 2011/12 financial year? The following list contains the more common items that you need to consider when preparing your personal income tax return.

CLOTHING, UNIFORMS AND FOOTWEAR
   
The replacement of these items will be deductible subject to the following conditions.

• The uniform must be a compulsory requirement of your employer; or
• The clothing must be occupation specific eg a nurses or police uniform; or
• The clothing must be protective in nature

 
Laundry of the above clothing is also deductible and claims not exceeding $150 are not subject to substantiation requirements.

ATTENDANCE AT CONFERENCES AND TRAINING COURSES

The costs associated with attendance at these events will be deductible on the basis that attendance at events such as these will increase knowledge and skills that have a direct relationship to your employment.

LICENCES

Licences that are required to perform your employment duties are deductible and examples would include Responsible Serving of Alcohol and Gaming Licences.

INCOME PROTECTION INSURANCE

Contributions made to policies of this nature are deductible only if the proceeds of the policy form part of Assessable Income.

INTERNET CONNECTION
   
Allowable only to the extent that the internet is used in connection to your employment.

TOOL REPLACEMENT

Replacement of items of this nature are fully deductible if their purchase price is $300 or less. Some example are:

• Carpenter’s tools of trade
• Plumber’s tools of trade
• Mobile telephones
• Briefcases, laptop bags etc.

If the cost of the item is more than $300 then the item would be a depreciable asset and deducted over its expected life.

TAX AGENT FEES

The cost of having your income tax return prepared by a registered tax agent is deductible together with associated costs such as travel and accommodation.

TELEPHONE

Telephone charges both mobile and landline are deductible to the extent that they relate to your employment duties.

TRAVEL EXPENSES

This can be a major deduction and can also be subject to abuse by taxpayers so care must be taken when making claims of this nature. The most common is motor vehicle expenses and these can be deductible in the following circumstances:

• Travel in the course of your normal employment duties. This could include such things as customer deliveries, trips to the post office or to the bank.
• Travel between places of employment. For example your employer has two or more business locations and you are required to travel from one location to another.
• Travel where you are required to carry bulky items. For example a carpenter carrying his tool box.
• The claiming of motor vehicle expenses is subject to certain substantiation requirements which may include the maintenance of a motor vehicle log book so once again care must be taken in this area.

Remember that deductions are only allowable to the extent that they have been incurred in earning your assessable income and you are required to have the necessary documentation to show that the expense has been incurred.

You must retain this documentation for a period of five years.

Brian Hoult is a Chartered Accountant for MGI - Business Solutions Worldwide.

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