Engineer Tax Return and Deduction Checklist
As an engineer, you know better than anyone that precision is everything – and this is particularly true when it comes to your taxes. It might not be the most fun activity in the world but, if you look at it the right way, then tax time is actually a great opportunity to get some money back.
Far too many people miss out on deductions that they are entitled to claim as part of their job. The checklist below will give you a good idea of what to look for initially, but it's a really smart idea to get some expert help as well. An experienced tax agent, such as the consultants here at H&R Block, will be able to help you find expenses you'd never even heard of and ultimately get the best possible return.
To complete your return as an engineer employed by a company, you'll first need an income statement from your employer (previously called a "payment summary" or "group certificate"). This is a summary that outlines all of your salary, wages, allowances and bonuses for the financial year.
You won't need to have a copy of this statement, as it should be lodged by your employer directly to the ATO. Once this has been lodged, we can download the information for you and then help you work out your deductions.
What do I need to know about claiming deductions?
As you know, you're entitled to claim deductions on any money spent during the financial year on products or services that directly related to earning an income. But there are two things you need to remember:
1) First, you need to have spent the money yourself (it can't have been reimbursed by your employer), and
2) Secondly, you need to keep a record of the expense such as a receipt or invoice.
What deductions can I claim?
There is a wide range of deductions you can claim as an engineer, such as:
- Travel expenses when you're driving to and from work, but only if you're required to transport heavy, bulky tools or equipment (such as a set of tools that you need to perform your job building machines) from home because there's nowhere secure to leave them at your work
- Any transport expenses including parking fees and tolls, if you are driving between multiple jobs (for example, your day job as an electrical engineer and your second job as a university lecturer) or to different work locations during the day, such as from a work site back to the main office
- Award transport payments for deductible work-related travel
- The cost of insuring any personal tools or equipment, such as a special set of spanners, to the extent that you use them for your work (so if you also use the items outside of work, you can only claim a partial deduction)
- Self education costs for attending any courses, training or seminars specifically related to your current line of work, such as a graduate degree in your specific area of engineering specialisation (such as a Masters in Chemical Engineering) with the goal of progressing in your current role
- Any expenses connected to buying, repairing and cleaning any work clothing items that are distinctive to your company (such as a shirt or pants with a company logo on it) or that have protective benefits such as a hard hat, gloves, safety glasses or goggles, helmets or breathing masks as well as sunglasses or anti-glare glasses, sunhats and sunscreen
- Journals, periodicals and magazines that are specifically related to your job as an engineer
- Union and professional association fees
- Any renewal fees for licences, regulatory permits, certificates or white cards related to your work, but not the initial cost of getting these items
- Any meals you buy and eat when you work overtime, but only if you get an overtime meal allowance under an industrial law, award or enterprise agreement and it's included in your assessable income
- Phone and internet expenses for any work-related usage on your personal phone or device, provided they are not already covered by your employer
- The cost of a first aid training course if you're a designated first aid person and need to do first aid training to assist in emergency work situations
- Working from home office or workshop expenses such as heating or cooling, and repairs to equipment
- Travel expenses such as accommodation and meals if you travel for work and need to stay away from home overnight (for example, if you need to travel interstate to oversee an on-site project) and pay these expenses yourself
What can't I claim?
There are several key expenses you can't claim, including:
- Regular clothing of any kind, such as plain drill work pants, business clothing, running shs or long sleeved t-shirts, that can be worn outside of your workplace, even if you only ever wear these items when you're at work and even if they provide a small amount of protection
- The cost of renewing your driver's licence, even if having it is a condition of your employment
- The cost of purchasing prescription glasses or contact lenses, unless they're anti-glare glasses and you wear them to reduce the risk of illness or injury while working
- Any tools or equipment provided to you by your employer
- The cost of any meals or snacks consumed during the course of a normal work day, even if you are given an allowance by your employer to cover the meal expense
What records do I need to keep?
Your job is all about accuracy, and the same thinking applies to your taxes. You need to stay on top of your receipts and have a comprehensive set of records if you want to get a good tax refund. It's a good idea to create an easy and reliable system to help you keep on top of this throughout the year.
Remember, you don't need to keep physical receipts, and it's acceptable to keep a digital copy (such as a photo of a receipt or an email receipt) provided it is possible to read:
- The name of the supplier
- Amount of the expense
- Nature of the goods or services
- Date the expense was paid
- Date of the document
You also don't need to keep receipts for expenses under $10 (as long as these don't cumulatively come to more than $200).
What happens if I make a mistake in my tax return?
We know this sort of thing can accidentally happen to anyone, and if you find you've made an error or omission then we strongly recommend dealing with it as soon as possible. It's important that you take care in putting together the information and supporting documentation when filing your tax return, and only claim deductions that are genuine to avoid penalties and possibly even prosecution from the ATO.
It's easy to make an innocent mistakes sometimes, and if you lodge yourself and realise you've submitted incorrect or unsubstantiated claims then you should contact H&R Block immediately and we will assist you in making the necessary amendments.
Still have some questions about lodging your tax return? Talk to H&R Block. Our experienced tax consultants will be able to help. Call 13 23 25 for details or find your nearest office and book an appointment online.
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