The things you can claim tax on as a teacher.
Many educators have been teaching remotely due to COVID-19 restrictions. What are some expenses teachers can claim for when working from home?
This year we expect to see an increase in working from home claims but would remind teachers to check any other claim they may be making to ensure they are not claiming for expenses that they are not incurring while working from home, e.g. classroom supplies.
To support everyone working from home during the period from 1 March to 30 June 2020, the ATO has implemented a new shortcut method to calculate the additional costs of working from home. The new shortcut method allows people, including teachers, who are incurring some form of expense as a result of working from home due to COVID-19 to claim a rate of 80 cents per hour worked at home. To claim using this method, you must keep a record of the hours worked from home. This may be in the form of a timesheet or diary.
Work-related daily expenses you can claim- Buying things for the classroom.
A lot of teachers spend their own money on classroom supplies and buying things for students. Can they claim any of that back?
Unfortunately, teachers can’t claim a deduction for the cost of gifts for their students or for helping to meet students’ expenses – for example, paying for lunch.
However, teachers can claim a deduction for the cost of classroom supplies used to perform their job. Classroom supplies could include items such as pens, markers, stamps, paint, stationery, posters, maps, storybooks and prizes to reward and encourage students.
If the item is used for work and personal use, then the amount claimed will need to be apportioned between work and personal use.
Work-Related Travel Expenses
What you can claim
Generally, the cost of normal trips between your home and work is a private expense you cannot claim an income tax deduction for. However, as an employee teacher, there are certain situations where you may be able to claim deductions for travel between your home and workplace.
Transporting students or bulky equipment
You can claim the cost of using your car to travel between your home and work if you had to transport either of the following:
- students – for example, to a sporting venue
- bulky equipment you needed to use at work and for which there was no secure storage area at your workplace.
Travelling between separate workplaces
Work-related car and travel expenses also include the cost of travel directly between two separate workplaces – for example, when you have a second job.
Travel to an alternative workplace
Work-related car and travel expenses also include the cost of travel:
- from your normal workplace to an alternative workplace while you are still on duty, and back to your normal workplace or directly home
- from your home to an alternative workplace, and then to your normal workplace or directly home
Work-related daily travel expenses you cannot claim
Generally, the cost of normal trips between your home and work is a private expense you cannot claim a deduction for, even if:
- you do minor tasks on the way to work or home, such as picking up the mail
- you have to travel between your home and work more than once a day – for example, you drive home at the end of the school day and then return to work to attend a school speech night in the evening
- you are on call – for example, you are on stand-by relief teaching and your employer contacts you at home to come into work
- you work outside normal business hours – for example, you are
- conducting parent-teacher interviews after work hours
- at school during the school holidays preparing for the next term
The motor vehicle provided by your employer or any other person
You cannot claim a deduction for car expenses if your employer or any other person provides a car for you and you do not pay for any of the running costs.
You cannot claim a deduction for any expenses you incur for the direct operation of a car that your employer provides and that you or your relatives use privately at any time, even if the expenses are work-related – such expenses form part of the valuation of the car for fringe benefits tax purposes.
You cannot claim a deduction for the cost of travelling to another workplace for a social function.
You cannot claim a deduction for any fines you receive, such as speeding or parking infringements.
How to claim your work-related daily travel expenses
How you work out your claims and what records you need to keep will depend on whether the motor vehicle you use is considered to be a car and whether you own or lease it.
Claiming car expenses
If the motor vehicle you drive is a car, and you are entitled to claim a deduction for your work-related car expenses, there are two methods you can choose from to work out the amount you can claim.
The two methods are:
- Cents per kilometre
You can claim a deduction for the decline in value (depreciation) of your car up to the value of the car limit if you use the logbook method.
Cents per kilometre method
You can use this method to claim up to a maximum of 5,000 work kilometres, even if you have travelled more than 5,000 work kilometres. For example, if you have travelled 5,085 work kilometres, you cannot claim for the extra 85 kilometres.
When working out your deduction using the cents per kilometre method, you do not need receipts or other written evidence, but we may ask you how you worked out your estimate of work kilometres. For example, by:
- using a diary of work-related travel
- basing your costs on a regular pattern of travel.
HOME OFFICE EXPENSES
What you can claim
If you perform some of your work from your home office, you may be able to claim a deduction for the costs you incur in running your home office, even if the room is not set aside solely for work-related purposes.
You may be able to claim:
- the decline in value (depreciation) of home office equipment such as computers and telecommunications equipment – if your equipment costs less than $300, you can claim a full deduction for the work-related portion
- work-related phone calls, including from mobiles for calls to students regularly while you are away from your workplace – for example, you call parents of your students to discuss behavioural issues
- work-related internet access charges
- the cost of heating, cooling and lighting your home office that is over the amount you would ordinarily have to pay if you did not work from home
- the costs of repairs to your home office furniture and fittings.
A depreciating asset, such as a computer, is an asset that has a limited effective life and can reasonably be expected to decline in value over the time you use it.
If you purchase an item that costs more than $300, you can only claim a deduction for its decline in value.
What you cannot claim
Occupancy expenses include rent or mortgage interest, council rates and house insurance premiums. You can only claim occupancy expenses where your home office is considered to be a place of business. If your only income is paid to you as an employee, you are generally not able to claim a deduction for your occupancy expenses.
What records you need to keep
With record keeping, what does the ATO need teachers to keep as evidence? Do you need a record for every claim, regardless of how small?
For small expenses, $10 or less, as long as the total of claims for small expenses is less than $200, teachers don’t need to keep a receipt. However, they will need to keep a record in order to claim a deduction. For example, they can make a record by writing it in a diary.
For information on when a teacher does not need to keep receipts for overtime meals and overnight travel expenses including accommodation and meals, please refer to the information on record-keeping on the ATO website.
For expenses that the teacher does need to keep a record of, the ATO has a handy record-keeping tool, deductions in the ATO’s app.
Finally, what advice do you have for teachers for the coming 12 months in terms of record-keeping that will make the process easier for the next time around?
Working out your claim
To claim a deduction for the electricity and gas you use and the decline in value of your office furniture, you can claim either of the following:
- a deduction for your actual expenses
- a deduction you work out at a rate of 45 cents per hour.
To use the 45 cents per hour method of claiming, keep a diary to record the amount of time you use your home office for work purposes. The diary must show a representative period of at least four weeks to establish a pattern of use for the whole year.
If you receive a laptop at no cost through a government initiative, you cannot claim a deduction for the cost of the laptop because you have not incurred the expense.
You may be able to claim a deduction if you have any uniform, occupation-specific clothing, protective clothing, laundry or dry-cleaning expenses that relate to your work as an employee.
You can claim a deduction for the cost of buying, hiring, repairing and cleaning certain work-related uniforms or protective clothing.
You cannot claim a deduction for the cost of purchasing or cleaning a plain uniform or conventional clothing worn at work, even if your employer tells you to wear them because it is a private expense. This includes expenditure on:
- sports clothes – for example, tracksuits, T-shirts, aerobics clothing, swimming costumes, shorts, socks and running or aerobic shoes – even if you are a physical education teacher
- clothing that you have to wear for medical reasons – for example, support stockings
- conventional clothing that is damaged at work
- everyday footwear – for example, dress, casual or running shoes.
You cannot automatically claim a deduction just because you received a clothing, uniform, laundry or dry-cleaning allowance from your employer.
You cannot claim costs met by the school or costs that are reimbursed.
A compulsory uniform is a set of clothing that, worn together, identifies you as an employee of an organisation having a strictly enforced policy that makes it compulsory for you to wear the uniform while at work.
You may be able to claim a deduction for shoes, socks and stockings if they are an essential part of a distinctive compulsory uniform and the characteristics of which (colour, style, type) are specified in your employer’s uniform policy. Wearing of the uniform must be consistently enforced. If your employer requires you to wear a distinctive uniform but does not consistently enforce the wearing of the uniform, the design of the uniform must be registered before you can claim a deduction.
Single items of compulsory clothing
You may be able to claim for a single item of distinctive clothing, such as a jumper or tie if it is compulsory for you to wear it at work. Generally, clothing is distinctive if it has the employer’s logo permanently attached, and the clothing is not available to the general public.
Non-compulsory uniforms or corporate wardrobe
Suppose your employer requires or encourages you to wear a distinctive uniform or corporate wardrobe but does not consistently enforce the wearing of it. In that case, you can claim a deduction for the cost of the clothing only if the design of the clothing is registered. If you wear a non-compulsory uniform or corporate wardrobe, you cannot claim for stockings, socks or shoes, because these items cannot be registered as part of a non-compulsory uniform. Your employer can tell you if your non-compulsory uniform or corporate wardrobe is registered.
You can claim a deduction for the cost of buying, hiring, replacing or maintaining protective clothing. Protective clothing is clothing that you wear to protect yourself from the risk of illness or injury posed by your income-earning activities or the environment in which you are required to carry them out. You can also claim a deduction for the cost of clothing that you use at work to protect your ordinary clothes from soiling or damage – for example, laboratory coats or art smocks.
Laundry and dry-cleaning
You can claim a deduction for the cost of laundering and dry-cleaning work clothes that are eligible according to the relevant category described on this page (compulsory uniforms, single items of compulsory clothing, non-compulsory uniforms or corporate wardrobe, and protective clothing). For example, you can claim a deduction for cleaning a uniform that your employer provides and that you must wear at work.
You can claim laundry expenses for washing, drying or ironing such work clothes, including laundromat expenses. If your claim for laundry expenses is $150 or less, you do not need written evidence – you may use a reasonable basis to work out your claim.
Suppose you claim a deduction for laundry expenses that is more than $150, and your total claim for work-related expenses (other than a car, meal allowance, award transport allowance and travel allowance expenses) exceeds $300. In that case, you need written evidence for the total claim. You can claim the cost of dry-cleaning work clothes if you have kept written evidence to substantiate your claim. You do not need written evidence if your total claim for work-related expenses is $300 or less.
Other common expenses
What are some common expenses that teachers can claim for at tax time?
Some of the common work-related expenses a teacher may be entitled to claim a deduction for includes their work-related phone usage and work-related home office expenses (including internet).
They may be entitled to claim a deduction for excursions and school camps that have an educational benefit related to the curriculum, where the teacher had to pay their expenses; or first aid courses if they are the designated first aid person; or seminars that relate to their work as a teacher or education professional.
They may also be able to claim for protective items and equipment such as sunscreen, sunglasses and sun hats worn while they are working to protect them from the risk of illness or injury because their duties require them to spend prolonged periods outdoors, teaching aids or union and professional fees.
Remember, for a teacher to claim a work-related expense, they need to satisfy the following:
- They must have spent the money and not been reimbursed
- It must be directly related to earning their income
- They must have a record to prove it
- If the expense is used for work-related and private purposes, only the work-related portion of the expense can be claimed as a deduction.
For teachers who undertake professional learning or take additional courses or qualifications, can they claim the cost of this self-education on their tax?
Self-education expenses are deductible, where the course leads to a formal qualification. The course must also have a sufficient connection to the teacher’s current work duties and:
- Maintain or improve the specific skills or knowledge a teacher requires
- Result in, or be likely to result in, an increase in income from teaching
Self-education expenses for a course won’t be deductible if it is only generally related to a teacher’s duties or it enables a teacher to get new employment.
Some other expenses you might be able to claim to include: union fees, professional memberships and subscriptions, and work-related books, magazines and journals. Donations to registered charities may also be able to be claimed, as long as you haven’t received anything in return for your donation, such as raffle tickets or novelty items.
You might also be able to claim bank fees charged on investment accounts, as well the cost of income protection insurance and any fees paid to your tax agent for preparing your annual return.
When it comes to preparing your tax return, it pays to know what items are tax-deductible. To help ease the stress of tax time, have a chat with your tax agent or visit the ATO’s website if you need more clarity around what is deductible. Always keep a thorough record of your paperwork to help make submitting your tax return a seamless process.