By Mark Chapman
Depending on your area of employment, there are a range of tax deductions that could be available.
The basic rule is that if you’ve incurred an expense as part of your job, you can claim it.
For instance, if you’re a taxi driver, you can claim fuel for your car, while if you’re a tradie, you can likely claim a deduction for an array of essential tools.
Such examples are relatively straightforward and obvious, but with tax being something of a grey area for many, it is inevitable that some of the claims tax specialists encounter aren’t always of the typical variety. Amongst the examples that H&R Block has encountered is a high-profile television personality set that gets stored by his personal appearance.
Each time he graced our screens, he bought a new suit.
Once he’d worn each suit, he gave it away to a charity shop.
Not only did he want to claim a tax deduction for the cost of each new suit (which he claimed he was obliged to wear to maintain his personal brand), but he also wanted to claim a further tax deduction for the donation to charity.
Sadly for him, the ATO doesn’t allow deductions for the cost of conventional clothing, a category that includes business suits, even those purchased by TV stars.
As for the donations – well, in theory, a donation to a charity is tax deductible, but what is the value of a second-hand suit?
Our dapper star couldn’t say because he didn’t have receipts from the charity, and without a receipt, there is no possible deduction.
Still with the rich and famous, a well-known fashion model had undertaken various cosmetic procedures, such as Botox, to maintain her appearance.
She argued that the work done was to maintain her career past the point that it would otherwise have faded out if she hadn’t had the work done.
As such, she argued there was a clear link between cosmetic surgery and deriving her income. It’s an argument that seems superficially compelling but it’s not one the ATO would agree with so far as they are concerned, medical procedures are rarely if ever tax-deductible, no matter what the reason.
Taxpayers in the adult entertainment industry can claim all manner of interesting deductions.
Taxpayers in the US – but not here – have even claimed that breast enhancements could be tax deductible as a “tool of the trade” (not an argument that would find favor here, following the same logic as the cosmetic surgery for the model, above).
So, it’s a controversial claim even for adult performers but the lady – with no known connection to the adult industry – who tried to claim that her enhancements were necessary for work was facing even more of an uphill battle.
The claim wasn’t allowed.
Breast enhancements might be a tax no-no but adult performers can look at successfully making claims for items as diverse as dance lessons, hair care, oils, lingerie, costumes, and “toys”.
Another profession that can generate some very strange tax deductions is a circus performer.
Not many people can successfully make a claim for a clown costume, but one client who did was a professional clown.
The whole costume was allowable, including the red nose, as a work-related clothing claim. Similarly, the professional sword swallower was able to claim the ceremonial swords used in his act.
Can you claim a tax deduction for your dog?
In very limited circumstances, yes you can, both for the cost of acquiring the animal although the cost is depreciated over several years and for the costs of keeping it such as food, vet bills, etc.
The two most common scenarios where the cost of a dog is tax deductible are farming where an animal might be used to round up sheep, for instance, and security where the cost of a guard dog to patrol business premises might be allowable.
Other than that, forget it.
So, for the taxpayer who tried to claim for their pet poodle, no deductions were allowed.
About the author: Mark Chapman is the Director of Tax Communications at H&R Block Australia.
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