The 2017 tax season is approaching, and the team at Refund Express Australia wants to make sure that you know how to get the biggest possible refund on your Australian Tax Return, and start the new Australian financial year off with a head start.
You need to know exactly what you can, and can’t claim. In a previous post, we talked about various travel deductions you might be able to claim. Well we have more travel deduction suggestions that may help you. So what can you claim, and how?
Claiming kilometers traveled in your private personal car within your tax return:
You can claim the kilometers you travel for work purposes using your private personal car in your tax return. To claim for these kilometers, there are a few rules that apply;
- You can’t claim the travel from home to work, and work to home. This is considered a personal expense. The only way you might be able to claim travel from home to work is if you are required to transport bulky tools or equipment to do your job, and there is no way to store these tools and equipment at the workplace.
- The car must be leased, owned, or hired under a purchase agreement under your name. The only way you may be able to claim kilometers in a car that is leased, owned, or hired not directly under your name is if you have written confirmation that although not under your name the car belongs to you.
You can claim kilometers driven for work purposes, or from one place of work to another. For further explanation please see the examples below:
James worked for a real-estate company in a busy city, and often used his personal car to travel to various rentals to show to clients. Due to James using his own car to drive from his main office to the rental property, or sale property, James can claim the kilometers he traveled.
For James to claim the kilometers traveled James needs to physically record the exact kilometers he has traveled, why, and what date this was done in a log book. Without the logbook, James has no way to justify to his accountant and the ATO (Australian Taxation Office) that he drove those kilometers for work, and therefore cannot claim this in his tax return.
Another example is;
Lila worked as a Financial Planner for a small company out in the country. Lila often had to travel from her main office, to a client’s house or business if they could not make it into town. Due to this, Lila is also able to claim the kilometers she drove from her main office to her clients.
However, Lila would not be able to claim for the kilometers traveled if she was using a business car. This is because the car is not leased, owned, or hired under a purchase agreement in her name, and has no written evidence that although not in her name the car belongs to her.
Another example of travel for work purposes is;
Anthony worked two-part time jobs in a rural area. He often had to travel from one place of work to another straight after a shift. Due to Anthony traveling directly between the two places of work, he can claim these kilometers.
However, if Anthony was to go home in between the shifts he would not be able to claim the kilometers traveled due to it being considered personal travel by the ATO (Australian Taxation Office).
NOTE: If you want to claim kilometers for work travel it is always a good thing to keep a logbook or some form of record of how many kilometers were traveled, and when they were traveled, as the ATO can legally ask for the evidence at any time as part of an audit.
How to Record Kilometers in a Log Book:
If you do want to claim kilometers for work travel, it’s essential you keep a record. If you’re unsure how to record the kilometers down that you traveled, then Refund Express Australia is here to help! Below you will see an example of how to keep a basic record of kilometer travel. You can use a similar layout or the same layout we have used below:
|DATE||WHERE||ODOMETER START||ODOMETER FINISH||TOTAL KM TRAVELED|
|05/07/2017||Sydney to Melbourne||1034287||10351163||876.1|
|06/07/2017||Melbourne City to Frankston||10351163||10351218||55.8|
Bulky Tools and Equipment Travel Deductions:
You can also claim the transportation of bulky tools and equipment as a travel deductions. Like most tax deductions, there are rules, so Refund Express are here to help our clients understand what they can and can’t claim.
If you work think you can claim this deduction then read on as we outline the rules for you;
- To claim transport of heavy tools from home to work or from site to site, you need to use the bulky tools do your job; an example is:
John was a carpenter, and had to carry multiple bulky tools with him when working on various sites. If John didn’t take these tools with him he wouldn’t be able to properly do his job. Because John needs these tools to execute his job, John can claim the kilometers he travels from home to the work site.
However, John can’t claim his drive from work to home as John doesn’t need the tools to go home.
An example of how this rule can’t be applied is:
Eliza was a primary school teacher, and needed to take home a large tub full of student’s assignments to grade at home. Sadly, for Eliza this cannot be claimed because the student’s assignments are not considered a ‘bulky tool’.
- To also claim transport of bulky tools and equipment, your employer needs to expect you to transport your own equipment between workplaces, an example of this is;
Maria was an electrician for a big company in the city. She was required to transport her tools and equipment with her when working on sites, and Maria’s boss expected Maria to do this.
Due to Maria being expected to transport her own tools by her employer she can claim this for her tax return.
Another example of how this rule can’t be applies is;
Larry works as a plumber for a small company in the city. Larry’s boss didn’t expect Larry to transport his own tools due to Larry not having a license, and got various team members to transport his tools for him. Due to this, Larry can’t claim this on his return, as he wasn’t the one transporting the tools, and his boss didn’t expect Larry to transport his own tools.
- You can also claim the transportation of bulky tools and equipment if there isn’t an appropriate storage facilities at the work site. An example of this is:
Liam was a tradesman, and was required to have various bulky tools for work. He was also required to take them to work and home, as there wasn’t a secure location for Liam to store them at work. Due to this Liam can claim his travel from home to work, and back again, due to there not being a sufficient place to store the equipment at work.
A way this cannot be claimed is as follows:
Garry was a carpenter and took his tools to and from home and work for work, when attempting to claim for the travel the accountant calls Garry’s employer to question if Garry could store the bulky tools and equipment at work. The accountant tells Garry that his kilometers traveled are not valid due to him transporting the tools not being a requirement of his job.
By having all these ATO (Australian Taxation Office) rules apply to you, you may be able to claim more travel, and even travel from home to work and vice versa.
Note: The ATO (Australian Taxation Office) can and will call your employer if they feel that you are making a dodgy deduction, to avoid this we suggest only claiming the expenses you accrue.