While most of us would laugh at the idea of claiming a sword or Netflix subscription on your tax for some people they are allowable deductions! If you are claiming something out of the ordinary however, expect it to be challenged by the ATO.
The three golden rules that determine if you can claim something as a deduction are :
- You must have spent the money yourself & weren’t reimbursed by your organization.
- The deduction must directly relate to earning your income
- You must have a record to prove it
Some of the unexpected, but allowable deductions (remembering they must follow the 3 golden rules) include sunscreen, cosmetics, handbags, garden gnomes and Netflix!
Let’s look at 7 unusual deductions that the ATO have allowed:
Are Garden Gnomes Tax Deductible?
Apparently garden gnomes can actually be tax deductible for property investors. According to BMT Tax Depreciation CEO Bradley Beer gnomes are among hundreds of potential deductions for landlords which range from heated towel rails to clocks and fish tanks.
Tax Deductible Handbags!
Yes, you read that correctly the ATO actually came out and said that you could legitimately claim a handbag ….. providing you can demonstrate it is used for work purposes. This means that the cute little Valentino clutch that is only big enough for your lipstick probably won’t be tax deductible, however the Kate Spade leather tote may be tax deductible if you use it to carry your iPad, phone, calculator, stationery or other work-related items.
How Can I Claim Subscription TV on my Tax?
If you’re in the right profession you could claim subscription television on your tax for example a sports journalist could claim part of their Foxtel subscription for sports that are only available on their channels. However be aware that only the work related viewing can be claimed so if you’re also watching The Walking Dead that will be considered personal use.
Likewise an entertainment reviewer may be able to claim their television subscription as a tax deduction as well.
Claiming a Dog as a Tax Deduction
People mistakenly feel like they can claim the purchase of a guard dog as a tax deduction which is not the case, however you can claim food and vet bills can also be claimed if the dog is used for work purposes such as security or farming.
Can You Claim a Caravan as a Tax Deduction?
In some cases the answer is yes, but before you go out and buy a caravan for holidaying remember the three golden rules.
Mark Chapman, H & R Block director of tax communications, talks about one of their clients who travels a lot for work so decided to buy a caravan rather than continually fork out for hotel rooms, in this case the caravan was able to be used as a tax deduction.
Make Up as a Tax Deduction, Surely That’s Made Up!
Living in Australia with the high level of melanoma being diagnosed each year sunscreen is now able to be deducted if you work outdoors. If your job requires you to work outside and your make-up has a sun protection component to it then you can absolutely claim it!
So What About Claiming a Sword?
If you’re a Performance Artist then you can claim the tools of your train for example a clown can claim their clown suit, wig and red nose and a sword swallower could claim their sword.
So as long as you follow the three golden rules and you feel you can justify the expense to the ATO when asked there are some very surprising things that can be claimed as a tax deduction. These are only the tip of the ice burg so if you’re unsure whether or not you can claim something on your tax return why not ask us when you bring your information in.
If you are doing your own tax return be sure to check out the ATO website for information on your industry and things that you can claim, we have also some information on tax deductions for nurses and for teachers that may be useful as well.