HR BLOCK - Tax Tips for people for providing care & support
With tax time fast approaching, now is a great time to take stock of all the money you’ve spent on work-related items during the course of the year.
The question is: "Are you claiming everything you’re entitled to?"
The general rule is that if you incur an expense as part of your job and aren’t reimbursed for, you can make a claim for a tax deduction for them.
Here are some of the things you may not know you can claim (plus a few things you can’t claim):
- If you are required to wear a uniform as part of your role, the cost may be deductible. In order to be eligible for deduction, your uniform must have an official logo on it from your place of work.
- You can also claim a deduction for the cost of clothing that you use at work to protect your ordinary clothes from soiling or damage; for example laboratory coats and aprons.
- If you need protective clothing, such as non-slip shoes, they are deductible.
- If an item of clothing qualifies for a tax deduction, you can also claim for the cost of washing or dry cleaning that item
- The cost of cleaning and other materials purchased for use in your client’s premises are claimable.
- Professional subscriptions, whether to a professional body like the AMA or to a trade union, can be claimed.
- Agency costs, if you work through an agency, can be claimed.
- Computers, tools and equipment required for your work – such as fob-watches, iPad, laptop, stethoscope, etc. - are expenses that are claimable.
- Self-education expenses - must be related to your current job.
- Magazines, books and journals related to health and medicine.
- Home office running expenses can be claimed on either:
- Actual costs based on floor area used and actual expenses or
- A flat rate of 52 cents per hour
- Handbags, briefcases and satchels.
- Many home care and health care workers will need to use their own car as part of their job; such as transporting patients, travelling between patient’s homes or travel from one facility to another. All such journeys are potentially claimable. You can either claim using the cents per kilometre method or the logbook method.
- If you use the cents per kilometre method, your claim is based on a set rate for each work kilometre you travel. Under this method you are eligible to claim up to a maximum of 5,000 kilometres per year, per vehicle. If you travel in excess of 5,000 kilometres, this method of claim may not be right for you unless you are happy to cap your claim at 5,000 kilometres (which some people who haven’t kept a log book – see below – have to do).
- The claim value under this method is calculated by multiplying the total business kilometres travelled (limited to 5,000 per vehicle) by a standard rate of 68 cents per kilometre; a kilometre rate set by the ATO that is intended to takes into account all the vehicle running expenses (including depreciation).
- When claiming on a cents per kilometre basis you do not need written evidence, however you need to be able to demonstrate that you have covered the kilometres claimed. A diary of work-related journeys (including the kilometres travelled) will suffice.
- Alternatively, you can use the logbook method, where your claim is based on the actual business use percentage of each car expense. The claim you make for your motor vehicle under this method is determined by a log book that must have been kept for a minimum 12 week period and must be updated every 5 years. Through your logbook you can claim all expenses that relate to the operation of your car, by the proportion (as a percentage) of your business use.
Under the logbook method you must record all business journeys made in your vehicle over the 12 week period that it records, detailing;
- when the log book period begins and ends
- the car's odometer readings at the start and end of the period
- the total kilometres travelled
- the business percentage for the logbook period
For each journey in the logbook, you must record:
- the start and finishing times of each journey
- odometer readings at the start and end of the journey
- kilometres travelled
- You complete minor tasks on the way to work, such as picking up the mail
- You travel back to work for a security call out
If you make two or more journeys in a row on the same day, you can record them as a single journey.
You will need to keep all receipts throughout the year to justify your claim, such as insurance, servicing and repairs. Petrol can be estimated using the start and end odometer readings for the year, indicating the total kilometres travelled.
Depreciation is calculated as 25% of the written down value of the car.
You can obtain a free logbook from your local H&R Block office. There are also a number of logbook apps available which will record your journeys using your phone GPS system.
- There are, however, a few things you can’t claim including:
- Upfront fees, joining fees or search fees paid to a nursing agency.
- Ordinary wristwatches.
- You cannot claim the cost of normal trips between home and work, as that travel is considered 'private', even if:
a) You complete minor tasks on the way to work, such as picking up the mail
b) You travel back to work for a security call out
c) You work overtime and no public transport is available to use to get you home
If you need any assistance with your tax affairs or assistance with any other financial planning matters, contact H&R Block on call 13 23 25, visit one of their offices close to you or go to www.hrblock.com.au
Heroes of Home Care Heroes receive a discount on the preparation and lodgement of their tax returns.