IT Professional Tax Return and Deduction Checklist
You're a wizz at computers and know all the ins and outs of the digital world. But how up to date are you when it comes to taxes? You'll be pleased to know that the Australian tax system has come a long way in recently years in terms of modernising and streamlining the system, thanks to some digital shortcuts. But the basics remain the same – and you really need to get these right if you don't want to lose hard earned money.
It all comes down to knowing what deductions apply to you when doing your tax return. Some of them might be obvious, but there are probably a few you're missing that could make a big difference to your bottom line. This is where our expert tax consultants come in. They are passionate about taxes (yes, really!) and know exactly how to get you the biggest possible refund.
To complete your return, you'll need as an IT employee, 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 an actual 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 IT professional, such as:
- Any expenses related to buying equipment, technical journals or tools specifically required for your work, such as a standing desk or high-tech mouse
- The cost of insuring any personal equipment (such as a laptop) to the extent that you use it for your work (which means if you also use the equipment outside of work then 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 workshop focused on how to use a new CMS that is being implemented by your employer)
- Car expenses if you travel between different job locations on the same day, perhaps attending to various clients, or if you need to transport heavy or bulky equipment (such as a hard drive) that is needed for work but can't be left securely at your workplace
- Any expenses connected to buying, repairing and cleaning any work clothing items that are distinctive to your company (such as a t-shirt or shirt with a company logo on it)
- Travel expenses such as accommodation and meals if you travel for work and need to stay away from home overnight (for example, if you go interstate to attend a work conference on cloud computing) and pay these expenses yourself
- 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 expenses such as heating or cooling, decline in value of office equipment and repairs to equipment
What can't I claim?
There are several key expenses you can't claim, including:
- Any study or educational expenses that are not specifically related to your current job (for example, if you're currently employed to install computer systems but are doing a law degree at night with the plan of pursuing a career in cyberlaw)
- Any regular clothing worn to your workplace that could also be worn outside of work (such as black pants or a white shirt) even if you only wear it for work and bought it specifically to wear to work
- Childcare costs incurred while you're working
- 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?
Clear records are really important at tax time, so you need to stay on top of your receipts and have a comprehensive set receipts if you want to get a good tax refund. It's a smart 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?
It's okay, we know this can happen to anyone and strongly recommend dealing with it as soon as possible. This is always the best approach. It's essential that you take great 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 self-lodge 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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