You may not be aware that you could be able to claim a tax deduction on your handbag at tax time. Shoes, make up and even dogs are just some of the other things you might be able to claim. The main thing with any deduction is you need to be able to prove it is for work purposes. What you can claim and how much you can claim largely depends on the industry you work in. Luckily, the ATO has over 30 guides for specific industries. Read on below for some of the more interesting deductions you may be able to claim.
1. Your handbag
As mentioned, provided it is used for work to carry your laptop, phone, stationery and other work supplies, you can claim it!
2. Shoes and clothing
In addition to claiming a tax deduction on your handbag, you may be surprised to know you may be able to claim shoes too. Non slip work shoes for nurses, specific shoes for flight attendants and work boots for various occupations are just a few examples of the types of shoes you can claim depending on your work. Clothing must include a logo or be distinctive to your role to be claimable. You cannot claim a business suit.
3. Electricity
Many people now carry out part or all of their work from home. Regardless of whether you have a full home office or work from the dining table, you can still claim for electricity, gas and other home office expenses while you work. You can use the fixed rate method of 67 cents per hour to cover your electricity and office consumables. Just make sure you keep accurate records of your expenses and work hours.
4. A dog!
Before you get too excited, you can only claim a dog if it directly relates to work such as security or farm work. Expenses such as food and vet bills can be claimed by business owners. As for home based businesses, the family dog can be viewed as a grey area if your dog is used to secure the premises. Your gorgeous pug isn’t going to be claimable.
5. Donations
Whether you donate to a charity or make political donations, amounts over $2 are tax deductible.
6. Mobile phone
Do you use your personal phone for work calls? If so, you might be able to claim it. It’s important you keep accurate records as you can only claim the work portion of the bill, not your whole bill. For example, if around 50% of the use of your phone is for work, you can claim 50% of the bill.
7. AI tools
Newer guidance from the ATO confirms AI tools such as ChatGPT Plus and others may be tax deductible. They must be directly related to earning your income, and you must pay the subscription yourself.
8. Courses and seminars
If you are attending courses, getting an education or even attending investment seminars, they can be tax deductible. Courses and self-education needs to be directly related to your job and investment seminars need to be for an investment you already have such as a rental property.
9. Car expenses
When using your car for work, wear and tear, maintenance and petrol can all be claimed. There are rules around what you can claim so it’s important to keep accurate records. A simpler option is the short cut method where you just keep a record of your business kilometres and claim 85 cents per kilometre at tax time.
10. Home office expenses
Setting up your home office can be costly, but you can claim a deduction or depreciation on everything you buy for it from computers to printer ink. Remember electricity, broadband, phone and other expenses can also be included. Write down everything and claim what you can.
11. Union and membership fees
The total costs of fees associated with your employment such as union or membership fees for a professional body relating to your work are tax deductible.
12. Tax agent fees
When an agent prepares your tax return you can claim it the following year.
13. Laundry
If your entire laundry load consists only of work clothing (such as uniforms), you can claim $1 per load. If it’s a mixed load of work and personal items, you can claim 50 cents per load as laundry expenses. You can also claim dry cleaning for general work clothing, but if the total amount is over $300 you will need proof.
14. Caravans
You can’t claim the family caravan every time you take a trip, but if you travel for work and decide to use a caravan instead of paying for hotels and motels, you can claim it. You need to prove it is for business and not personal use.
15. Investment property expenses
Did you know most landlords can claim 2.5% depreciation on the cost of bricks and mortar? While investment properties have a plethora of deductions you can make, many landlords forget about depreciation. This is why it is so important to get the right tax advice with your investments. Get a depreciation report, which is tax deductible, and you may realise significant savings.
16. Superannuation
Salary sacrificing, boosting your super or splitting super with your partner are just a few of the tax-effective tips we share in this article on strategies to maximise super tax savings. Now that the concessional contributions cap is $30,000, there’s more room to salary sacrifice or make deductible contributions to boost your super and reduce tax.
17. Sunscreen and makeup
Gardeners, builders, construction workers and anyone else working outdoors can claim their sunscreen. If you’re required to work outside and your makeup contains sun protection, that can also be deductible.
18. Subscriptions
Industry-specific magazines and other subscriptions you pay for which relate to your work can be claimed on your tax.
How Financial Spectrum can help
We highly recommend engaging a qualified accountant to help you maximise your tax return. A good accountant will take the time to understand your personal situation and give you strategic tax advice to minimise your tax obligations both now and in the future. You’ll also have the peace of mind of knowing your return has been accurately prepared in compliance with tax laws in the event you are subject to an audit by the ATO.
Financial Spectrum’s financial advisors and accountants understand the complexities of tax planning and its role in shaping your financial future. Our team of experienced accountants specialise in crafting personalised strategies to optimise your tax position and achieve your financial goals faster.
Need support ahead of tax time? Book a complimentary consultation with one of our team today.
Frequently asked questions
Can I claim a handbag on my tax return in Australia?
Yes, you may be able to claim a handbag as a tax deduction if it’s used for work purposes — such as carrying a laptop, work phone, or documents. It must be directly related to earning your income, and you’ll need to keep a receipt and evidence of work-related use.
Is makeup tax deductible in Australia?
Makeup may be tax deductible if it’s required for your job and not for personal use — for example, if you work outdoors and use SPF makeup, or if you’re in a profession like performing arts or television. Keep receipts and note how it relates to your income-earning role.
Can I claim home office expenses if I work from home?
Yes. If you work from home, you can claim expenses such as electricity, internet, and office supplies. The ATO allows a fixed rate of 67 cents per hour worked from home to cover energy and consumables, but you must keep accurate records of hours worked.
Are AI tools like ChatGPT tax deductible?
Yes. Subscriptions to AI tools (like ChatGPT Plus) may be deductible if you use them to earn income. To qualify, you must personally pay for the subscription and show that it supports your work or business activities.