Accountants have revealed the more obscure claims that have worked and the ones that have been rejected at tax time.
Lingerie, caravans and gym memberships are some of the more unusual claims that Aussies could make on their tax returns.
Depending on your area of employment, there are a range of tax deductions that could be available.
The basic rule is that if you’ve incurred an expense as part of your job, you can claim it.
For instance, if you’re a taxi driver, you can claim fuel for your car, while if you’re a tradie, you can likely claim a deduction for an array of essential tools.
Mark Chapman, director of tax communications at H&R Block, said their agents deal with over 750,000 Australians a year and they’ve seen their fair share of strange claims.
He said taxpayers in the adult entertainment industry can claim all manner of interesting deductions and in the US they have even claimed their breast enhancements, although that won’t fly with the Australian Taxation Office.
“Breast enhancements might be a tax no-no but adult performers can look at successfully making claims for items as diverse as dance lessons, hair care, oils, lingerie, costumes and toys,” he said.
A very limited number of taxpayers are lucky enough to be able to claim gym memberships, Mr Chapman revealed, including professional sportspersons, some police officers and some defence force personnel.
“Bouncers aren’t on the list so for the bouncer who wanted to claim his martial arts course fees, no deduction was allowed,” he added.
Pet owners might get excited when they hear the cost of acquiring the animal can be claimed over several years as well as the cost for food and vet bills, but its only allowed in very limited circumstances, Mr Chapman said.
“The two most common scenarios where the cost of a dog is tax deductible are farming – where an animal might be used to round up sheep, for instance – and security – where the cost of a guard dog to patrol business premises might be allowable,” he said.
“Other than that, forget it. So, for the taxpayer who tried to claim for their pet poodle, no deductions were allowed.”
Lots of people try to claim for the cost of travelling from home to work and back again but usually, they are unsuccessful because the daily commute is regarded as private – not work-related, Mr Chapman explained.
“The only exception is where you’re required to carry bulky tools and equipment and you have nowhere secure at work to store them,” he said.
“That exception didn’t apply to the hairdresser who tried to claim the daily commute because she had to transport her scissors and clippers, which might have been sharp but certainly weren’t bulky.”
Good news for those who like to travel as a caravan could be tax deductible though, according to Mr Chapman.
“One taxpayer who travelled extensively for work decided to buy a caravan to provide overnight accommodation whilst working away, rather than paying for a hotel room every night,” he said.
“From a tax point of view, that stacks up to be deductible. But if you are in the same situation and also use the caravan for holidays, you’ll need to apportion the deduction between work use and private use.”
While those with a rental property would know that claiming mortgage interest, rates and repairs are usual deductions, you can also claim for items that improve your property’s ‘street appeal’ so splashing out on garden gnomes can be a win for your tax return, he added.
Another profession that can generate some very strange tax deductions is circus performer, he said.
“Not many people can successfully make a claim for a clown costume, but one client who did was a professional clown,” he said.
“The whole costume was allowable, including the red nose, as a work-related clothing claim. Similarly, the professional sword swallower was able to claim the ceremonial swords used in his act.”
Sadly, the ATO doesn’t allow deductions for the cost of conventional clothing, a category that includes business suits, he added.
One memorable client was a well-known fashion model who had undertaken various cosmetic procedures to maintain her appearance, Mr Chapman said, who argued that the work done was to maintain her career past the point that it would otherwise have faded out.
“As such, she argued there was a clear link between the cosmetic surgery and deriving her income,” he said.
“It’s an argument that seems superficially compelling but it’s not one the ATO would agree with; so far as they are concerned, medical procedures are rarely if ever tax deductible, no matter what the reason.”
source: news.com.au