Tax time can be challenging, especially for apprentices with various work-related expenses. Understanding what you can and cannot claim is essential for maximising your tax refund. This guide outlines the key deductions available to apprentices, ensuring you don’t miss out on any potential tax benefits.
General Principles for Claiming Deductions
To claim a deduction for work-related expenses:
Self-Incurred Costs: You must have spent the money yourself and not been reimbursed.
Direct Relationship: The expense must directly relate to earning your income.
Record Keeping: You must keep records to prove your expenses.
You can only claim the work-related portion of an expense. You can’t claim a deduction for any part of an expense that does not directly relate to earning your income.
Car Expenses
Non-Deductible: Regular commutes between home and work, even if you live a long way from your usual workplace or work outside normal business hours, are not deductible.
Deductible:
Trips between separate jobs in one day.
Travel between different workplaces for the same employer on the same day.
In Limited Circumstances:
Trips between home and work where you carry bulky tools or equipment necessary for your job. You can claim a deduction if:
The tools or equipment are essential to perform your employment duties and you don’t carry them merely as a matter of choice.
The tools or equipment are bulky, meaning they are awkward to transport due to their size and weight and can only be transported conveniently by using a motor vehicle.
There is no secure storage for the items at the workplace.
If you claim car expenses, you can use the logbook method or the cents per kilometre method to calculate your deduction. If you use the logbook method, you need to keep a valid logbook to work out the percentage of work-related use along with written evidence of your car expenses. If you use the cents per kilometre method, you need to be able to show how you calculated your work-related kilometres and that those kilometres were work-related.
If you claim work-related car expenses using one of these methods, you can’t claim any further deductions in the same tax return for the same car, such as servicing, and insurance costs. If your vehicle has a carrying capacity of one tonne or more, such as a ute or panel van, you can’t use the cents per kilometre method or the logbook method to calculate your claim. You can claim the actual costs you incur for the work-related use of your vehicle.
Clothing and Laundry Expenses
Non-Deductible: Conventional clothing (e.g., drill shorts and shirts worn by tradespeople, or black pants worn by hairdressers), even if required by your employer.
Deductible:
Protective clothing with features or functions to protect you from specific risks of injury or illness at work, such as steel-capped boots or hi-vis clothing.
Compulsory uniforms explicitly required by a workplace agreement or policy that is strictly enforced and distinctive to your organisation.
Expenses must not be reimbursed by your employer to claim a deduction.
Self-Education and Study Expenses
Deductible: Self-education and study expenses directly related to your employment as an apprentice that maintain or improve the skills and knowledge needed for your current duties or result in an increase in income from your current employment, such as your apprenticeship course.
Non-Deductible: Study related in a general way or designed to help you get a new job. For example, an apprentice carpenter can’t claim the cost of a bookkeeping course.
You can’t claim a deduction for the repayments you make on your study or training support loan.
Expenses must not be reimbursed by your employer to claim a deduction.
Tools and Equipment Expenses
Deductible: The cost of tools and equipment you use for work, including repairs and insurance.
If a tool or equipment costs more than $300, claim a deduction for the cost over a number of years (decline in value).
If a tool or equipment costs $300 or less (and doesn’t form part of a set that costs more than $300), claim an immediate deduction for the whole cost.
You can’t claim tools and equipment that are supplied by your employer or another person. If you also use the tools and equipment for private purposes, you can only claim the work-related portion. You also need to apportion the cost of insurance and repairs between private and work-related use.
Other Expenses
Deductible: The work-related portion of other expenses that relate to your employment, including:
Sunscreen, sunhats, and sunglasses where your duties require you to spend prolonged periods working outdoors.
Union and professional association fees.
Phone and internet costs, with records showing your work-related use.
Non-Deductible: Private expenses such as music subscriptions, childcare, parking fees, tolls or public transport on trips between home and work, fines, flu shots, and other vaccinations even if you’re required to have them for work.
Expenses must not be reimbursed by your employer to claim a deduction.
Keeping Track of Your Deductions
Using a tool like TaxFox can simplify keeping track of your expenses and receipts throughout the year. This ensures you claim every possible deduction and are prepared in case of an audit.
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By understanding and leveraging the specific deductions available to apprentices, you can significantly enhance your tax refund. Ensure you keep accurate records and only claim the work-related portion of your expenses. Always consult the ATO website for compliance.
For more detailed information, visit ATO Apprentice Deductions.
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