Travel Deductions and How to Claim Them
With the end of the financial year approaching, you’ll more than likely want to start planning for the new tax season by organising your 2019 income tax return, and getting that big old refund to start the year off with a smile. But how do I get a bigger refund, you ask?
As a starting point if you travel for work purposes, you can claim these expenses as travel expenses to increase your 2019 refund!
In order to claim work related travel expenses, these costs must directly relate to your current job. What travel expenses can apply you might be thinking? Luckily, Refund Express has all the help you need!
Accommodation and Travel Fare:
One of the many types of work related travel expenses could be any accommodation needed while traveling for work that you’ve had to pay for. It could also include any flight, bus, train, or taxi fares you may incur. An example of this is;
Ryan works for a legal firm in a small rural area. One afternoon, Ryan’s manager insists that he travel to Sydney for a seminar. Although the business pays for Ryan’s plane tickets, they don’t pay for his accommodation and taxi fares while in Sydney. Ensuring he keeps receipts, Ryan can claim all expenses incurred that the business hadn’t paid for during this business trip.
However, if Ryan paid for all his expenses and the company reimbursed him for the costs, then Ryan would not be able to claim the extra expenses incurred on his trip.
Another example is;
Tracie works for a local supermarket as a manager and is required to travel down to Melbourne for a work meeting once a year. The company doesn’t pay for the accommodation and does not offer any compensation for the money spent.
Due to this Tracie can claim the accommodation expenses incurred from the business trip and add this as a deduction to her tax return.
However, if the company had of paid for the room or offered some form of compensation for the accommodation, Tracie would not be able to claim accommodation as a deduction in her tax return.
Tolls, Parking, and Car Hire Fees:
If you haven’t had any trips like the above example, then don’t stress, there are more travel deductions you can claim. You can claim any bridge and road tolls you incur for the financial year. This also includes parking fees and car hire charges. While this does sound great, there is a catch.
You can only claim these when traveling for work.
Travel for work does not include traveling from home to work and work to home. It does, however, include traveling from one workplace to another workplace, or traveling from work to clients for meetings.
To break it down here’s another example;
Susie works as a state retail manager in a busy city, and a requirement for her job is to travel between various stores as well as to her main office. When traveling from work to one of the stores, Susie must go through a road toll area. Susie pays for the toll, and does not get compensated by her employer for the cost. Due to this, Susie can claim the road toll cost in her 2019 tax return.
However, if Susie was traveling from home to her main office and goes through a road toll area, this is not claimable for her tax return. This is because it is considered a personal expense.
Another example is;
Mark works as a real estate agent in a busy city. He is required to travel to show clients new apartments or houses. Although he has a work car, Mark pays for all the parking fees and is not reimbursed for the money spent. Due to this, Mark can claim the kilometers traveled and the amount he spent on parking fees for work purposes.
However, if the company pays for all expenses for the work car, Mark cannot claim parking fees in his tax return.
*You can only claim what you spend for work purposes if no compensation is made*
Travel from home to work is considered a personal expense because it is considered private travel by the ATO (Australian Taxation Office).
Another example of various fees you can claim is;
Marcus works as a travel agent in the city. As is typical for most metropolitan people, Marcus does not own a car and must catch various taxi’s or Uber’s to get around the city. Marcus is required to go see a partner store for work on the other side of the city, and he decides to catch a taxi. The cost is claimable due to him traveling for work purposes.
However, his train, tram, or taxi fees for traveling from home to work is not claimable.
The great thing about travel expenses as a deduction, is that it doesn’t end there! You can also claim for meals incurred from your work travel! To claim for a meal, you must fully acquire the expense while on a work trip. To simplify, here’s an example;
Beatrice works for a local accounting firm, and has been asked to fly to Brisbane for a work seminar/training day. The company pays for the flights to Brisbane and the accommodation, but not the meals Beatrice requires for her full day training. Due to the company not paying for this expense, Beatrice can claim her meals in her 2019 tax return.
However, if the company had given Beatrice any non-taxable allowances in her weekly pay, Beatrice will not be able to claim for the meals she purchased while attending the seminar/training day.
Another example is;
Dave is a truck driver for a supermarket company. As a requirement of his job, he is often on the road traveling. Dave does get a meal allowance in his weekly pay, however Dave often pays more than his allowance for his meals while travelling. By keeping his receipts, Dave can claim for the extra money spent on his meals while on the road.
However, if Dave’s meal allowance was larger, there is a high chance that he may not be able to claim his meals, due to the higher work compensation.
If you get paid an overtime meal allowance under an award and buy food and drink on overtime, you can claim up to the reasonable allowance expense amount the ATO (Australian Taxation Office) have set without needing written evidence. However, you can still only claim the amount you have spent.
If you need to claim more than the reasonable allowance expense amount, you need to keep written evidence of your expenses. This may include receipts, or bank statements.
Where to Claim Travel Expenses in the Refund Express Australia Website:
When you sign in, or create a new account on the Refund Express Australia Website, you will notice on the left side of the page a bar running down the page with multiple links. You will need to press ‘Start’, and answer the questions relating to your 2019 tax return. When you get to the deductions section, you continue until you see a page with the title ‘Other Work Deductions’. This is where you can claim any travel deductions you’re eligible for.
To add a travel deduction, you will need to press on the button that says, ‘Add Other Work Item’. This will load a new page where you get to input all the necessary details, and attach any needed documents.
In the ‘type’ drop down bar, you will need to select what deduction it is you want to claim. For example, if you want to claim for a seminar you had to go to for work, you would select ‘seminar’ from the ‘type’ drop down box. In the description free text box, you explain what you’re claiming for. An example is ‘Acquired accommodation fees when traveling to a seminar’. Once the description has been entered, you then enter the amount into the amount section.
This is the same process when claiming for any of the other work-related travel expenses.
TAX TIP: Always keep your receipts, your tax agent or the ATO (Australian Taxation Office) may ask for them to justify the deductions your claiming.
For more tax tips and help look no further than Refund Express Australia.
General advice disclaimer
General advice warning: The advice provided is general advice only as, in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.