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Maximising Your Tax Deductions as a Worker in the Agriculture Industry: A Comprehensive Guide

Tax time can be challenging, especially for workers in the agriculture industry 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 agriculture workers, ensuring you don’t miss out on any potential tax benefits.


General Principles for Claiming Deductions


To claim a deduction for work-related expenses:


  1. Self-Incurred Costs: You must have spent the money yourself and not been reimbursed.

  2. Direct Relationship: The expense must directly relate to earning your income.

  3. 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.


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Vehicle 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 vehicle 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 vehicle 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. You can claim the decline in value and running costs of all-terrain vehicles (ATVs), such as a quad bike, where you’re required to cover large distances of land that are not accessible by vehicle. You can only claim the decline in value for an ATV if you paid for the vehicle yourself and you were not reimbursed by your employer.


Travel Expenses


Deductible: Travel expenses incurred while travelling away from home overnight in the course of performing your employment duties, such as carting cattle long distances between farms. Travel expenses can include meals, accommodation, fares, and incidental expenses you incur when travelling for work.

Non-Deductible: Travel expenses paid for or reimbursed by your employer. You can’t claim the cost to transfer or relocate to a new work location.


Clothing and Laundry Expenses


Non-Deductible: Conventional clothing (e.g., footy shorts, track pants, jeans, drill shorts or jackets), even if required by your employer.

Deductible: The cost to buy, hire, repair or clean protective clothing that has features and functions to protect you from specific risks of injury or illness at work, such as gloves and steel-capped boots. You can’t claim a deduction if your employer pays for or reimburses you for these expenses.


Licences, Permits and Cards


Non-Deductible: The cost of getting a driver’s licence or the initial cost of getting a special licence or certificate to gain employment, such as a heavy vehicle permit or firearm licence.

Deductible: The additional costs to renew a special licence, condition on your licence or certificate to perform your work duties, such as renewing a forklift licence during the period you are working.


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Other Expenses


Deductible: The work-related portion of other expenses that relate to your employment, including:

  • Working dog and working horse expenses, such as food, vet bills and miscellaneous items like the decline in value of a saddle.

  • Hats and sunscreen.

  • Union and professional association fees.

  • Phone and internet costs, with records showing your work-related use.

  • Technical or professional publications.

  • Tools and equipment you use for work, such as a chainsaw or fencing tools.

  • If the tool or equipment costs more than $300, claim a deduction for the cost over a number of years (decline in value).

  • If the 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.

Non-Deductible:

  • Private expenses such as music subscriptions or childcare.


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 workers in the agriculture industry, 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 Agriculture Deductions.


Boost Your Tax Refund with TaxFox


For a more streamlined tax experience, consider using TaxFox, an innovative tax app designed to help Australian taxpayers boost their refunds effortlessly. With features like a digital logbook, receipt storage, and real-time tax refund tracking, TaxFox ensures you never miss a deduction. Download the app today on Android or iOS and take control of your tax returns.

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