AustraliaTo make a deductions claim, you must have made the purchase in the course of earning your assessable (taxable) income and it must not be a private, domestic or capital expense. If the expense was both work-related and private or domestic, you can only claim a deduction for the work-related portion.The basic rules for claiming a deduction are that you:

Must claim the deduction in the same income year that you made the purchase Can't claim an expense that you have been, or will be, reimbursed for May have to substantiate your claims with written evidence.

TRAVEL BETWEEN HOME AND WORK AND BETWEEN WORKPLACESWhile normal trips between home and work are considered private travel, you can claim deductions in some circumstances, as well as for some travel between two workplaces.If your travel was partly private and partly for work, you can claim only for the part that related to work.

What you can claimYou can claim the cost of travelling:

directly between two separate workplaces - for example, when you have a second job from your normal workplace to an alternative workplace - for example, a client's

premises - while still on duty and back to your normal workplace or directly home if your home was a base of employment (that is, you started your work at home and

travelled to a workplace to continue your work for the same employer) if you had shifting places of employment (that is, you regularly worked at more than

one site each day before returning home) from your home to an alternative workplace for work purposes and then to your

normal workplace or directly home if you need to carry bulky tools or equipment that you used for work and can't leave it

at your workplace - for example, an extension ladder or cello.

Example: Travel between jobsSue is a clerk at a large department store. She drives her car from her normal workplace to her second job as a waiter. After finishing work as a waiter, she goes directly home. Sue can claim the car expenses from her normal workplace to her second job. However, she can't claim the cost of travelling home from her second job.

Example: Travel to an alternative workplaceJanet, a clerk at a large department store in the city, is required to attend meetings at her employer's other store in the suburbs. She drives her car to the suburban store. As the meetings finish late, she drives straight home. Janet can claim the cost of each journey.

What you can't claim

You can't claim the cost of driving your car between work and home just because: you do minor work-related tasks - for example, picking up the mail on the way to

work or home you have to drive between your home and your workplace more than once a day you are on call - for example, you are on standby duty and your employer contacts

you at home to come into work there is no public transport near where you work you work outside normal business hours - for example, shift work or overtime your home was a place where you ran your own business and you travelled directly to

a place of work where you worked for somebody else You do some work at home.

Example: Work from homeMohammed's employer has an office in the city but is happy for him to work from home three days each week. On these days, Mohammed sometimes has to drive into the office for a meeting before returning home to work.In this situation, the expense Mohammed incurs driving between his home and work is a private expense that he can't claim a deduction for.

Itinerant work You cannot count your home as a workplace unless you carry out itinerant work. If you do itinerant work (or have shifting places of work) you can claim the cost for

driving between workplaces and your home. The following factors may indicate that you do itinerant work:

Travel is a fundamental part of your work, as the very nature of your work, not just because it is convenient to you or your employer.

You have a 'web' of work places you travel to, throughout the day. You continually travel from one work site to another. Your home is a base of operations - if you start work at home and cannot complete it

until you attend at your work site. You are often uncertain of the location of your work site. Your employer provides an allowance in recognition of your need to travel

continually between different work sites and you use this allowance to pay for your travel.

CAR EXPENSES You can claim a deduction for work-related car expenses if you use your own car in

the course of performing your job as an employee, for example, to: carry bulky tools or equipment attend conferences or meetings deliver items or collect supplies travel between two separate places of employment (for example, when you have a

second job)

travel from your normal workplace to an alternative workplace and back to your normal workplace or directly home

travel from your home to an alternative workplace and then to your normal workplace or directly home (for example, if you travel to a client's premises).If the travel was partly private, you can claim only the work-related part.

If you receive an allowance from your employer for car expenses, it is assessable income and the allowance must be included on your tax return.Most people can't claim the cost of travel between their home and their workplace because this travel is private. However, people doing itinerant work or who need to carry bulky tools or equipment that is used for work and can't be left at the workplace can claim for driving between work and home. You can choose which of the following four methods for claiming work-related car expenses that gives you the largest deduction for any car and choose different methods for different cars. Some adjustments to your claim may need to be made if the car is jointly owned.If you use a borrowed car or a vehicle other than a car for work purposes, you can claim the costs you incur (such as fuel costs) as a travel expense. You can't use any of the methods described here to calculate your claim.The four methods are:

1. Cents per kilometer method2. 12% of original value method3. One-third of actual expenses method4. Logbook method

Cents per kilometer method Your claim is based on a set rate for each business kilometer. You can claim a maximum of 5,000 business kilometers. You don't need written evidence but you need to be able to show how you worked out

your business kilometers (for example, by producing diary records of work-related trips).

12% of original value method Your claim is based on 12% of the original cost of your car or 12% of its market value

at the time you first leased it. The cost or value is subject to luxury car limits. Your car must have travelled more than 5,000 business kilometres in the income year

(or, if you used the car for only part of the year, it would have travelled more than 5,000 business kilometres had you used it for the whole year).

You don't need written evidence but you need to be able to show how you worked out your business kilometres.

One-third of actual expenses method Your car must have travelled more than 5,000 business kilometres in the income year

(or, if you used the car for only part of the year, it would have travelled more than 5,000 business kilometres had you used it for the whole year).

You claim one-third of all your car expenses, including private costs (but excluding capital costs, such as the purchase price, the principal on any money borrowed to buy your car and the cost of any improvements).

For fuel and oil costs, you can keep receipts to work out the amounts or you can estimate them based on odometer records that show readings from the start and the end of the period you had the car during the year.

You need written evidence for all the other expenses for the car, as well as records that show the car's engine capacity, make, model and registration number.

Logbook method Your claim is based on the business-use percentage of the expenses for the car. Expenses include running costs and decline in value but not capital costs, such as the

purchase price of your car, the principal on any money borrowed to buy it and any improvement costs.

To work out your business-use percentage, you need a logbook and the odometer readings for the logbook period.

You can claim fuel and oil costs based on either your actual receipts or you can estimate the expenses based on odometer records that show readings from the start and the end of the period you had the car during the year.

You need written evidence for all other expenses for the car.

Jointly owned carsThere are special rules for claiming work-related car expenses for jointly owned cars under each of the four claim methods, as follows:Cents per kilometre methodUnder this method, a joint owner can claim up to a maximum of 5,000 kilometres in respect of their income-producing use. Where both joint owners use the car for separate income-producing purposes, each can claim up to a maximum of 5,000 kilometres in relation to their income-producing use.12% of original value methodA joint owner can deduct their share of 12% of the cost of the car. Therefore, where there are two joint owners, each owner can claim a deduction of 6% of the cost of the car if they are using this method. This method is only available where the taxpayer's income-producing use exceeds 5,000 kilometres.One-third of actual expenses methodA joint owner can deduct one-third of the car expenses they incur, excluding capital expenses (that is, one-third of their share of jointly incurred expenses and one-third of expenses wholly incurred by them) and one-third of their share of depreciation. This method is only available where the taxpayer's income-producing use exceeds 5,000 kilometres.Logbook methodA joint owner can deduct the car expenses, including depreciation (but excluding other capital expenses), multiplied by the business-use percentage.

Owned or leased carsYou can claim a deduction for using a car that you owned, leased, or hired under a hire-purchase agreement.

If you owned or leased a car or hired one under a hire-purchase agreement, you can use one of the four methods explained in calculating your deduction to claim your work-related car expenses.You can establish your ownership of the car by demonstrating your financial contributions to:

the initial purchase of the car lease payments hire-purchase agreements loan payments

You may not be considered to own or lease the car if your do not make financial contributions – even though you pay for expenses such as registration, insurance, maintenance or other running costs. This does not stop you from claiming a deduction for the expenses you pay, but you cannot use any of the four methods explained in Calculating your deduction,You are considered to be the owner or lessee of a car and eligible to claim expenses where a family or private arrangement made you the owner or lessee, even though you were not the registered owner. For example, we would allow you to claim for a family car that was given to you as a birthday present and which, although it was not registered in your name, you used it as your own and for which you paid all expenses.

OTHER TRAVEL EXPENSESWhat you can claimYou may be able to claim travel expenses you incurred for meals, accommodation and incidentals while away overnight for work - for example, going to an interstate work conference. Generally, if your travel did not involve an overnight stay, you can't claim for meals even if you received a travel allowance.Other travel expenses you may be able to claim include:

the costs you actually incur (such as fuel costs) when using a borrowed car or a vehicle other than a car for work purposes

air, bus, train, tram and taxi fares car-hire fees

You may have to show that you have reduced your claim to exclude any private portion of your trip.If you receive an allowance from your employer for travel expenses, it is assessable income and must be included on your tax return. You may be able to claim a deduction for work-related expenses covered by these payments.You are able to claim for travel between your home and your workplace in limited circumstances, such as if you need to carry bulky tools or equipment that you used for work and can't leave it at your workplace. You can also claim for travel between two separate places of employment. Vehicle expenses If you use a borrowed car or a vehicle that is not a car for work-related purposes, do not use the methods for claiming work-related car expenses. Instead, you can only claim your actual expenses.

A car is a motor vehicle designed to carry a load of less than one tonne and less than nine passengers. The term 'car' does not include a motorcycle or similar vehicle. Your actual expenses include the cost of:

fuel and oil repairs and servicing interest on a car loan lease payments insurance registration

Other travel expenses How you calculate your travel expenses claim depends upon whether or not you get any reimbursements or allowances for your travel expenses.

If your travel expenses are reimbursed If you get reimbursed for the travel costs you incur:

you do not need to show the reimbursement as income you cannot claim any deduction

If your travel expenses are not reimbursed If you don't get any reimbursement for your travel expenses, you're entitled to claim a deduction for the actual expenses you incur, less any private component.

If you receive a travel allowance If you are paid a travel allowance:

you must declare the allowance on your tax return as income you are entitled to claim a deduction for the actual expenses you incur, less any

private component.If you get paid an allowance for some travel expenses, you do not have to keep written evidence of your expenditure provided your claim does not exceed the reasonable allowance amount we set for each year, for example:

overtime meal allowance expenses - where you buy food and drink on overtime and you get a meal allowance under an industrial award

domestic travel allowance expenses - accommodation, food and drink, and incidentals

travel allowance expenses for employee truck drivers - food, drink and incidentals overseas travel allowance expenses - food, drink and incidentals that are covered

by the allowance.

Keeping travel expense recordsVehicle expenses - other than a carIf you are eligible to claim expenses for using a borrowed car or a vehicle other than a car, you can only claim your actual expenses. You need to keep receipts for your actual expenses, such as for:

fuel and oil repairs and servicing interest on a car loan lease payments insurance registration.

Travel expensesIf your travel allowance is shown on your payment summary and you want to make a claim against it, you must have written evidence for the whole of your claim, not just the excess over the reasonable amount.The records you need to keep for travel expenses for fares, accommodation, food, drink and incidentals depend on the length of your trip and if it is domestic or international.If you travel for six or more nights in a row, you may need to keep a travel diary (see tables below) in which you record the dates, places, times and duration of your activities and travel. The purpose of a travel diary is to allow accurate calculation of the employment-related and private elements of your trip. If the travel was partly private, you can claim only the work-related part.

If you did not receive a travel allowanceDomestic travel Overseas travel

Written evidence

Travel diary

Written evidence

Travel diary

Travel less than 6 nights in a row

Yes No Yes No

Travel 6 or more nights in a row

Yes Yes Yes Yes

If you did receive a travel allowanceIf you received a travel allowance and your claim does not exceed the reasonable allowance amount:

Domestic travel Overseas travelWritten Travel Written Travel diary

evidence diary evidence

Travel less than 6 nights in a row

No No Written evidence is required for overseas accommodation expenses but not for food, drink and incidentals

No

Travel 6 or more nights in a row

No No Written evidence is required for overseas accommodation expenses - but not for food, drink and incidentals

Members of an international air crew - No if you limit your claim to the amount of allowance you receivedOther people - Yes

If you received a travel allowance and your claim exceeds the reasonable allowance amount:Domestic travel Overseas travel

Written evidence

Travel diary

Written evidence

Travel diary

Travel less than 6 nights in a row

Yes No Yes No

Travel 6 or more nights in a row

Yes Yes Yes Members of an international air crew - No if you limit your claim to the amount of allowance you receivedOther people - Yes

AWARD TRANSPORT PAYMENTSIf you receive an award transport payment from your employer, it is assessable income and must be included on your tax return. You may be able to claim a deduction for work-related transport expenses covered by these payments.

Award transport payments are allowances covering either transport expenses or car expense reimbursements that are paid under an industrial law or award in force on 29 October 1986.Some changes made to the industrial law or award after that date are treated as if they had been made on that day. Your union or employer can tell you the '29 October 1986' amount.If you choose to claim no more than the '29 October 1986' amount, you don't need written evidence.If you want to claim more than the '29 October 1986' amount, you will need written evidence for the whole of your claim for transport expenses.Car expense reimbursementThe award transport payment sets a 'car expense reimbursement' amount for a certain number of kilometers. If you travel additional kilometers in your car and they are not covered by the award transport payment, you can make the claim on your tax return. You can use the logbook method (you will need written evidence) or the cents per kilometer method.If you are already claiming kilometers under the award transport payment, you can't also count them as business kilometers under either the cents per kilometer or logbook method. However, they are counted as part of the total kilometers travelled for the logbook method. If you don't know how many business kilometers relate to your award transport payment, you can make a reasonable estimate.Alternatively, you can choose not to link any part of your claim for work-related car expenses to the award amount. If this is the case, when you make your claim on your tax return, don't claim car expenses covered by your award transport payment. You can then use any of the four methods to calculate your car expenses. Treat any work-related kilometers covered as business kilometers. You will need to provide the written evidence required by the method you selecting when calculating your deduction.The example below explains the different ways you can claim when you receive an award transport payment.ExampleEmma travelled 22,000 kilometres in total during the income year. Half of this was work-related. She received an award transport payment of $2,000 which, under her award, covered travel of 5,000 work-related kilometres. This left her with 6,000 business kilometres not covered by the payment. The '29 October 1986' award transport payment was $1,400.Emma has to show the $2,000 on her tax return. She can claim her car expenses in one of the following ways:She can claim $1,400 ('29 October 1986' amount).She can claim $1,400 and then use 5,000 of her additional 6,000 business kilometres towards a claim for total car expenses using the cents per kilometre method.If she has written evidence of her expenses, she can claim $1,400 and then use all the outstanding 6,000 business kilometres towards a claim for total car expenses using the logbook method. She divides her 6,000 business kilometres by her 22,000 total kilometres to work out her business use percentage:6,000 / 22,000 x 100 = 27%If she has written evidence of her expenses, she can treat the kilometres covered by the award transport payment as business kilometres, and claim them as work-related car expenses. This gives her a total of 11,000 business kilometres towards a claim for total car expenses using

the logbook method. She divides her 11,000 business kilometres by her 22,000 total kilometres to work out her business use percentage:11,000 / 22,000 x 100 = 50%

CLOTHING, LAUNDRY AND DRY-CLEANING EXPENSESYou can claim a deduction for the cost of buying and cleaning occupation-specific clothing, protective clothing and unique, distinctive uniforms.To make a deduction you may need to have written evidence that you purchased the clothing and diary records or written evidence of your cleaning costs.

Occupation-specific clothingYou can claim for clothing that is specific to your occupation, is not every day in nature and allows the public to easily recognise your occupation - such as the checked pants a chef wears.You can't claim the cost of purchasing or cleaning clothes you bought to wear for work that are not specific to your occupation, even if your employer tells you to wear them. For example, you cannot claim a bartender's black trousers and white shirt, or pantyhose and a suit.

Protective clothingYou can claim for clothing and footwear that you wear to protect yourself from the risk of illness or injury posed by your income-earning activities or the environment in which you are required to carry them out. To be considered protective, the items must provide a sufficient degree of protection against that risk.Protective clothing includes:

fire-resistant and sun-protection clothing safety-coloured vests non-slip nurse's shoes rubber boots for concreters steel-capped boots, hard hats, gloves, overalls, and heavy-duty shirts and trousers overalls, smocks and aprons you wear to avoid damage or soiling to your ordinary

clothes during your income-earning activities.Ordinary clothes (such as jeans, drill shirts, shorts, trousers, socks, closed shoes) are not regarded as protective clothing if they lack protective qualities designed for the risks of your work.You can't claim the cost of purchasing or cleaning ordinary clothes you wear for work that may also protect you. For example, you can't claim for normal, closed shoes, even though you wear them to protect your feet.

Work uniformsYou can claim for a uniform, either compulsory or non-compulsory, that is unique and distinctive to the organisation you work for.

Clothing is unique if it has been designed and made only for the employer. Clothing is distinctive if it has the employer's logo permanently attached and the clothing is not available to the public.You can't claim the cost of purchasing or cleaning a plain uniform.

Compulsory work uniformThis is a set of clothing that identifies you as an employee of an organization with a strictly enforced policy that makes it compulsory for you to wear the uniform while you're at work.You may be able to claim a deduction for shoes, socks and stockings where they are an essential part of a distinctive compulsory uniform and where their characteristics (colour, style and type) are specified in your employer's uniform policy.You may be able to claim for a single item of distinctive clothing, such as a jumper, if it's compulsory for you to wear it at work.

Non-compulsory work uniformYou can't claim expenses incurred for non-compulsory work uniforms unless your employer has registered the design with AusIndustry.Shoes, socks and stockings can never form part of a non-compulsory work uniform, and neither can a single item such as a jumper.

Cleaning of work clothingYou can claim the costs of washing, drying and ironing eligible work clothes, or having them dry-cleaned.You must have written evidence, such as diary entries and receipts, for your laundry expenses if both:

the amount of your claim is greater than $150, and Your total claim for work-related expenses exceeds $300 - not including car, meal

allowance, award transport payments allowance and travel allowance expenses.If you don't need to provide written evidence for your laundry expenses, you may use a reasonable basis to work out your claim. For washing, drying and ironing you do yourself, we consider that a reasonable basis for working out your laundry claim is:

$1 per load - this includes washing, drying and ironing - if the load is made up only of work-related clothing, and

50 cents per load if other laundry items are included.If you choose a different basis to work out your claim, we may ask you to explain that basis.

Dry-cleaning expensesYou can claim the cost of dry-cleaning work-related clothing. If your total claim for work-related expenses exceeds $300 - not including car, meal allowance, award transport payments allowance and travel allowance expenses - you must have written evidence to substantiate your claim.

GIFTS AND DONATIONS

You can only make tax deductible gifts or donations to organizations that have the status of deductible gift recipients (DGRs).Deductions for gifts are claimed by the person that makes the gift (the donor).For you to claim a tax deduction for a gift, it must meet four conditions:

The gift must be made to a deductible gift recipient. We call entities that are entitled to receive tax deductible gifts 'deductible gift recipients' (DGRs).

The gift must truly be a gift. A gift is voluntary transfer of money or property that you receive no material benefit or advantage for.

The gift must be covered by one of the gift types. The most common gift is money but deductions may be claimed for other types of gifts such as property or shares.

The gift must comply with any relevant gift conditions. For some DGRs, the income tax law adds extra conditions affecting the types of deductible gifts they can receive.

How much to claimThe amount of the deduction you can claim depends on the type of gift. For gifts of money, it is the amount of the gift but it must be $2 or more. For gifts of property, there are different rules, depending on the type of property and its value. There are slightly different rules for donations to bucket collections for bushfire and flood victims.A tax deduction for most gifts is claimed in the tax return for the income year in which the gift is made. However, you can elect to spread the tax deduction over five income years in certain circumstances.

Bushfire and flood donationsIf you made one or more donations of $2 or more to bucket collections conducted by an approved organisation for bushfire and flood victims, you can claim a tax deduction equal to your contribution without a receipt provided the contribution does not exceed $10.

What you can't claimYou cannot claim a deduction for:

Raffle or art union tickets Items such as chocolates and pens The cost of attending fundraising dinners, even if the cost exceeds the value of the

dinner Membership fees Payments to school building funds made, for example, as an alternative to an

increase in school fees Payments where you have an understanding with the recipient that the payments

will be used to provide a benefit for you.

HOME OFFICE EXPENSESYou may be entitled to claim deductions for home office expenses:

Running costs may be deductible. Occupancy expenses are generally not deductible for an employee. You must keep records.

Running costsIf you perform some of your work from a home office, you may be entitled to a deduction for the costs you incur in running it, including:

for home office equipment such as computers, printers and telephones, the cost (for items costing up to $300) or decline in value (for items costing $300 or more - see Tools, equipment and other assets)

work-related phone calls (including mobiles) and phone rental (a portion reflecting the share of work-related use of the line) if you can show you

are on call, or have to phone your employer or clients regularly while you are away from your workplace

heating, cooling and lighting the costs of repairs to your home office furniture and fittings cleaning expenses.

Occupancy expensesAs an employee, you are generally not able to claim a deduction for occupancy expenses, which include rent or mortgage interest, council rates and house insurance premiums.

Records you must keep You must keep records of home expenses and these can be: Receipts or other written evidence of your expenses, including receipts for

depreciating assets you have purchased Diary entries you make to record your small expenses ($10 or less) totalling no

more than $200, or expenses you cannot get any kind of evidence for, regardless of the amount

Itemized phone accounts from which you can identify work-related calls or, if you do not get an itemized account from your phone company, records (such as diary entries - see below)

A diary you have created to work out how much you used your equipment, home office and phone for business purposes over a representative four-week period.

INTEREST, DIVIDEND AND OTHER INVESTMENT INCOME DEDUCTIONSYou can claim a deduction if you are able to show that you incurred expenses earning interest, dividend or other investment income. Your expenses might include:

account-keeping fees for accounts held for investment purposes management fees and fees for investment advice relating to changes in the mix of

your investments interest charged on money borrowed to purchase shares or other investments.

In this section:Interest income expenses You can claim account-keeping fees where the account is held for investment purposes - for example, a cash management account. You will find these fees listed on your statements or in your passbooks.

If you are not the sole holder of an account, you can only claim your share of fees, charges or taxes on the account. For example, if you hold an equal share in an account with your spouse, you can only claim half of any allowable account-keeping fees paid on that account.

Dividend and share income expenses You can claim a deduction for interest charged on money borrowed to purchase shares and other related investments from which you derived assessable interest or dividend income. If you used the money you borrowed for both private and income-producing purposes, you must apportion the interest between each purpose.Some interest on money borrowed to purchase shares, units in unit trusts and stapled securities, which is attributable to capital protection under a capital protected borrowing, is not deductible and is treated as a payment for a put option.You can claim for ongoing management fees or retainers and amounts paid for advice relating to changes in the mix of investment.

You may also be able to claim a portion of other costs if they were incurred in managing your investments, such as:

travel expenses the cost of specialist investment journals and subscriptions borrowing costs the cost of internet access the decline in value of your computer.

If you were an Australian resident when a listed investment company (LIC) paid you a dividend, and the dividend included a LIC capital gain amount, you can claim a deduction of 50% of the LIC capital gain amount. The LIC capital gain amount will be shown separately on your dividend statement.If your assets are funded by a high level of debt and relatively little equity, and your debt-to-equity ratio exceeds certain limits, the thin capitalisation rules may apply, limiting your deductions.

Forestry managed investment schemes If you make payments to a forestry managed investment scheme (FMIS), you may be able to claim a deduction for these payments if you:

Currently hold a forestry interest in an FMIS, or held a forestry interest in an FMIS during the income year; and

Have paid an amount to a forestry manager of an FMIS under a formal agreement.You can only claim a deduction if the forestry manager has advised you that the FMIS satisfies the 70% direct forestry expenditure rule in Division 394 of the Income Tax Assessment Act 1997.

SELF-EDUCATION EXPENSESYou may be able to claim a deduction for self-education expenses if your study is work-related or if you receive a taxable bonded scholarship. In some circumstances you have to reduce the amount of your claim by $250.In this section:

Eligible courses Work-related self-education expenses are expenses you incur when you undertake a work-related course to obtain a formal qualification from a school, college, university or other place of education.The course must have a sufficient connection to your current employment; that is, the course must:

maintain or improve the specific skills or knowledge you require in your current employment, or

result in, or is likely to result in, an increase in your income from your current employment.

You cannot claim a deduction for self-education expenses for a course that does not have a sufficient connection to your current employment even though it:

might be generally related to it, or enables you to get new employment.

Taxable bonded scholarship recipientsYou can claim a deduction for self-education expenses if, in doing the course, you are satisfying study requirements to maintain your right to a taxable bonded scholarship. If you are employed by the scholarship provider, normal work-related self-education rules apply.Expenses you can claim You can claim the following expenses:

accommodation and meals (if away from home overnight) computer consumables course fees decline in value for depreciating assets (cost exceeds $300) purchase of equipment or technical instruments costing less than $300 equipment repairs fares home office running costs interest internet usage (excluding connection fees) parking fees (only for work-related claims) phone calls postage stationery student union fees student services and amenities fees textbooks trade, professional, or academic journals travel to-and-from place of education

Expenses you can't claim You cannot claim the following expenses:repayments of Higher Education Loan Program (HELP) loans:

HECS-HELP FEE-HELP OS-HELP VET FEE-HELP SA-HELP Student Financial Supplement Scheme (SFSS) repayments home office occupancy expenses meals - where not sleeping away from home

$250 reduction In certain circumstances you may have to reduce your allowable self-education expenses by $250. However, you may have other types of expenses - some of which are not allowable as a deduction - that can be offset against the $250 before you have to reduce the amount you can claim for allowable expenses.

Expenses you can offset against the $250 reductionWhile you can't claim a deduction for the following expenses, they can be taken into account in determining whether you have to reduce your overall claim.

childcare computer purchase fares, travel or car expenses for these journeys: for work-related self-education, the second leg of a trip if you went from home to

your place of education and then to work, or the other way around If you receive a taxable bonded scholarship and are not employed by the

scholarship provider, travel from home to your normal place of education and back.

TOOLS, EQUIPMENT AND OTHER ASSETSIf you buy tools, equipment or other assets to help earn your income, you can claim a deduction for some or all of the cost. The amount you can claim depends on the amount of time you use them for work purposes. For example, if you bought a power tool or a computer which you use half for work purposes and half for private purposes, you can claim only half the cost or decline in value.The type of deduction you claim depends on the cost of the asset:

For items that don't form part of a set and cost $300 or less, or form part of a set that together cost $300 or less, you can claim a deduction for their cost.

For items that cost more than $300, or that form part of a set that together cost more than $300, you can claim a deduction for their decline in value

Examples of tools, equipment or assets: calculators computers and software desks, chairs and lamps filing cabinets and bookshelves hand tools or power tools

protective items, such as hard hats, safety glasses, sunscreens and sunglasses professional libraries safety equipment technical instruments.

You can also claim the work-related cost of repairing and insuring your tools and equipment and any interest on money you borrowed to purchase these items.If you use items for both personal and work-related purposes, make sure you keep records, such as a diary, so that, if requested, you can show how you estimated the amount of private use and work-related use.An upgrade is not a repair. For example, if an upgrade that you make to a computer or other asset costs more than $300, you must claim a deduction for the decline in value on the cost of the upgrade.

OTHER DEDUCTIONSYou may be able to claim other deductions not previously mentioned. As a rule of thumb, if you need to spend money to earn income, you can usually claim it - either as an immediate deduction or over time. To be a legitimate expense claim, you have to be able to show:

you need to incur the expense to earn the income; and the expense is not private or domestic in nature.

We produce a number of occupation-specific guides for claiming deductions. In this section:

Books, periodicals and digital information If the item cost less than $300 you can claim an immediate deduction where it satisfies all of the following requirements:

It is used predominantly for earning assessable income that is not income from carrying on a business.

It is not part of a set of assets acquired in the same income year that costs more than $300.

It is not one of a number of identical or substantially identical items acquired in the same income year that together cost more than $300.

If the item cost more than $300, or is part of a set that cost more than $300, you can add it to your professional library and claim a deduction for the decline in value.

Cost of managing your tax affairs You can claim a deduction for expenses you incur in managing your own tax affairs, including those for:

preparing and lodging your tax return and activity statements travel, to the extent that it is associated with obtaining tax advice - for example, the

travel costs of attending a meeting with a recognised tax adviser appealing to the Administrative Appeals Tribunal or courts in relation to your tax

affairs obtaining a valuation needed for a deductible gift or donation of property or for a

deduction for entering into a conservation covenant.

Expenses relating to preparing and lodging your tax return and activity statements include the costs of:

buying tax reference material lodging your tax return through a registered tax agent obtaining tax advice from a recognised tax adviser (a registered tax agent, barrister

or solicitor) dealing with us about your tax affairs.

You generally incur the fees in the year you pay them.You cannot claim for the cost of tax advice given by a person who is not a recognized tax adviser.Tax shortfall and other penalties imposed for failing to meet your obligations are not deductible.

ExampleOn 14 July, Louise visited a registered tax agent to prepare and lodge her previous year's tax return. The tax agent lodged the return in September and charged Louise $220, which she paid immediately. Louise can claim a deduction for the tax agent's fee on her next tax return.Election expenses You can claim a deduction for election expenses, including a candidate's costs of contesting a:

local government election - your deduction for local government body election expenses cannot exceed $1,000 for each election contested, even if the expenditure is incurred in more than one year of income

state or territory election federal election.

Entertainment expenses only qualify as deductible election expenses in very restricted circumstances.If you claim a deduction for any election expense and you get a reimbursement, you must include the reimbursement as income on your tax return.

Income protection insurance You can claim the cost of premiums you pay for insurance against the loss of your income. However, you must include any payment you receive under such a policy on your tax return.If the policy provides for benefits of an income and capital nature, only that part of the premium attributable to the income benefit is deductible.You can't claim a deduction for a premium or any part of a premium:

for a policy that compensates you for such things as physical injury where the policy is taken out through your superannuation and insurance premiums

are deducted from your super contributions.For example, you can't claim a deduction for:

life insurance premiums trauma insurance premiums critical care insurance premiums.

Interest charged by the ATO You can claim a deduction for interest we charge on:

late payment of taxes and penalties any increase in your tax liability as a result of an amendment to your assessment any increase in other tax liabilities, such as goods and services tax (GST) or pay as

you go (PAYG) amounts any underestimation of your tax liability when you vary an instalment for GST or

PAYG. You can claim any interest charge we impose in the year in which it is incurred: when you are charged the interest if your income tax assessment is amended in the year in which the interest accrues on your account where there is an increase

in other tax liabilities.

Overtime meals If you get paid an overtime meal allowance under an industrial instrument (such as an award) and buy food and drink on overtime, you can claim the reasonable allowance amount we have set for overtime meal allowance expenses.If you need to claim more than the reasonable allowance amount, you need to keep written evidence of your expenses.We publish reasonable travel allowance amounts in annual taxation determination Personal contributions you are allowed as a tax deduction are concessional contributions.Generally, you must include amounts received as overtime meal allowances as income on your tax return. However, if your award overtime meal allowance was not shown on your payment summary and was not more than the reasonable allowance amount for each meal, you don't have to include the amount on your tax return providing that you:

have fully spent the allowance; and Don’t claim a deduction for overtime meal expenses.

Personal superannuation contributions If you made contributions during the year to a complying superannuation fund or a retirement savings account (RSA) you may be able to claim a deduction for those contributions if you are between 18 and 75 years old and you are:

self-employed – that is, a sole trader or a partner in a partnership Not employed or you earn less than 10% of your total income from employment.

If you want to make (or vary) a claim for a tax deduction for personal contributions, you must provide a valid notice of intent to your super fund or retirement savings account (RSA) provider and have this notice acknowledged (in writing) by your fund.A valid notice can be given by any of the following methods: completing a Notice of intent to claim or vary a deduction for personal super contributions

(NAT 71121) using a form provided by your fund writing to your fund, stating you wish to claim a tax deduction for your personal super

contributions and including at least the following information:

your first name your family name your date of birth your fund name your fund member account number the financial year you made your personal contributions the total amount of personal contributions you made to the fund or RSA the amount of these personal contributions you intend to claim as a tax deduction a declaration that you are lodging this notice by the due date, that is, by the earlier

of the following the day you lodge your tax return for the year in which you made the contributions the end of the income year following the one in which you made the contributions. a declaration that the information contained in your correspondence is true and

correct your signature The date (day, month and year).

a declaration that the information contained in your correspondence is true and correct your signature The date (day, month and year).

Project pool deductions If you have capital expenditure directly connected with a project, you may be able to claim a deduction for capital expenditure allocated to a project pool. A project is carried on if it involves some form of continuing activity - not a less-active investment, such as a rental property.The project must be:

operated for a taxable purpose carried on or proposed to be carried on for a taxable purpose which was

abandoned, sold or otherwise disposed of before or after it started to operate. You cannot claim a deduction for: private or domestic expenditure, such as the cost of constructing a driveway at

your home capital expenditure directly connected with a project undertaken in carrying on a

business.

Seminars, conferences and education workshops You can claim the cost of attending seminars, conferences or education workshops that are sufficiently connected to your work activities. This can include formal education courses provided by professional associations.If attendance involves travel, you may have to show that you have reduced your claim to exclude any private portion of any trip.

Un-deducted purchase price (UPP) of a foreign pension or annuity If you have income from a foreign pension or annuity you may be entitled to claim a deduction to reduce the taxable amount of the pension or annuity income if your pension or annuity has an un-deducted purchase price (UPP). Only some foreign pensions and annuities have a UPP. The UPP is the amount you contributed towards the purchase price of your pension or annuity - your personal contributions.If your pension is from another country and you think you are entitled to claim a deductible amount, complete a Request for a determination of the deductible amount of UPP of a foreign pension or annuity.

Union fees and subscriptions to associations. You can claim a deduction for:

union fees Subscriptions to trade, business or professional associations.

You can only claim payments of levies to a strike fund where the fund is used solely to maintain or improve the contributors' pay. Most unions and associations send members statements of the fees or subscriptions paid.

Work-related expenses - tools and equipmentYou can claim a deduction for the work-related portion of:

the cost of repairs to your computer the interest on money borrowed to finance the cost of the computer, and the decline in value of your computer

Computer software expensesExpenditure incurred in acquiring computer software forms part of the cost of the unit of computer software acquired. The general rules for depreciating assets apply to these units of computer software. The decline in value is worked out using the prime cost method and an effective life of four years.

Other tools and equipmentYou can claim an immediate deduction for the full cost of tools and equipment bought on, or after, 1 July 2001 if:

the cost of a particular item does not exceed $300, and you use the item predominantly for the purpose of producing assessable income

that is not income from carrying on a business the item is not part of a set that you start to hold in that income year, where the

total cost of the set exceeds $300 the total cost of the item and any other identical or substantially identical item that

you start to hold in that income year does not exceed $300.

If you do not meet all of the conditions listed above, you cannot claim an immediate deduction for the full cost of your tools and equipment.However, you can claim a deduction for the decline in value of the tools and equipment you use for work based on their effective life.

Claiming decline in value of tools and equipmentYou can claim a deduction for the decline in value of tools and equipment you use for work. Tools and equipment are depreciating assets; a depreciating asset is an asset that has a limited effective life and can reasonably be expected to decline in value over the time it is held for use.

Claiming the cost of repairs of tools and equipmentYou can claim a deduction for the cost of repairing tools and equipment.

Apportioning expensesIf you use tools and equipment partly for work and partly for private purposes, you can only claim a proportion of the cost of repairs and a proportion of their decline in value. For example, if you use your sewing machine 80% of the time for work and 20% for sewing for your family, then you can only claim a deduction for 80% of the cost of repairs and 80% of the decline in value of the machine.

Deductions for businessMost expenses you incur in running your business can be claimed as deductions to reduce your assessable income. The rules vary depending on the business structure you operate under and the nature of each expense.

Keeping good recordsYou must keep records of your business transactions, including expense claims, for five years after they are prepared or obtained, or the transactions completed, whichever occurs later. If you don't, your expense claim may be denied or reduced. You can store records in either paper or electronic form, but they must be readily accessible and available in English.

What you can claim and whenYou can claim most expenses you incur in running your business as deductions to reduce your assessable income. As a general rule, you can claim your day-to-day business operating expenses in full, in the year you incur them. However, the costs of capital items (such as plant and equipment) are claimed over a number of years.

Motor vehicle expenses

The deductions you can claim for the business use of a motor vehicle depend on the business structure you operate under, the type of vehicle used, and whether you use it for private purposes. Our online calculator will help you work out your entitlement to a deduction.

Business travel expensesTo claim deductions for business travel, you need specific, documented evidence of the expenses.

Capital allowances and depreciating assetsUnder the capital allowance rules, you can claim a deduction for the decline in value (or depreciation) of capital assets such as motor vehicles, furniture, and plant and equipment. Small businesses with turnover of less than $2 million can use simplified calculation methods.

Salary, wages and superIf you operate your business as a company or trust, you can claim a deduction for salary and wages paid to employees, and for super contributions you make to a complying super fund or retirement savings account for them. If you're self-employed, you can claim a deduction for your own super contributions in your personal tax return and for salary and wages you pay to other employees.

LossesIf you operate a business that makes a loss, you can carry forward that loss and may be able to claim a deduction for it in a future year. The rules differ for different business structures. If you're a sole trader or a partner in a partnership, you may be able to claim business losses by offsetting them against other income - for example, income you earn from salary or wages.

Home office expensesIf you run all or some of your business from home, you may be able to claim deductions for rent, rates, insurance and utilities. What you can claim depends on whether or not your home is your place of business and if you have an area set aside exclusively for business activities.

Repairs, maintenance and replacement expensesYou may be able to claim a deduction for repairs to machinery, tools or premises you use to produce business income, as long as the expenses are not capital expenses.