The things you can claim tax on as a teacher.
As a result of the limits imposed by COVID-19, many teachers now conduct their classes online. When instructors work from home, they are eligible to get reimbursement for certain expenditures.
This year, we anticipate seeing an increase in the number of claims that involve working from home.
However, we would like to remind teachers to check any other claims that they may be making to ensure that they are not claiming for expenses that they are not incurring while working from home, such as supplies for the classroom.
The Australian Taxation Office (ATO) has introduced a new shortcut way to assess the additional costs of working from home, with the goal of providing assistance to those who are working from home for the period beginning on March 1, 2020, and ending on June 30, 2020.
People, including teachers, who are suffering some type of expense as a result of working from home due to COVID-19 are able to claim a rate of 80 cents per hour worked at home thanks to the new shortcut technique.
This rate applies only to hours worked from home. In order to submit a claim using this strategy, you will need to maintain a log of the hours you spent working from home. A timesheet or a diary could be used for this purpose.
Purchasing items for the classroom is an example of a work-related daily expense that can be deducted from your paycheck.
A significant number of educators spend their own money on items for their kids and on materials for the classroom. Is it possible for them to get any of that money back?
Unfortunately, teachers are not allowed to take a tax deduction for the cost of presents they purchase for their pupils or for helping them meet their financial obligations, such as paying for their meals.
However, educators have the ability to take a deduction for the cost of classroom supplies that are directly related to the performance of their job. Items such as pens, markers, stamps, paint, stationery, posters, maps, storybooks, and awards to reward and encourage pupils could all be included in a list of potential classroom supplies.
If the item is used for both personal and professional purposes, the claimed amount will need to be split in such a way that each use receives an appropriate share.
Work-Related Travel Expenses
What you can claim
The cost of regular commutes between your home and place of employment is considered a personal expense, thus you are not eligible to deduct it from your taxable income. On the other hand, if you are an employee teacher, there are several circumstances in which you might be eligible to claim deductions for travel expenses between your home and your place of employment.
Transporting students or bulky equipment
If you have to carry either of the following, you are eligible to make a claim for the expense of using your car to travel between your house and your place of employment:
- 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
Car and travel expenses for work include not only the cost of travelling to and from a single workplace but also the cost of travelling directly between two distinct workplaces, such as when you have two jobs.
Travel to an alternative workplace
Car and travel expenses used for business purposes also include the following costs:
- 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
The cost of regular commutes between your home and place of employment is considered a personal expense, and as such, it is not eligible for tax deductions under any circumstances, including the following:
- On the way to work or back home, you perform errands of lesser importance, such as picking up the mail.
- Multiple trips back and forth between your house and place of employment are required of you on a daily basis; for instance, you might drive home at the end of the school day, only to turn around and drive back to the office in the evening so that you can attend a speech night at the school.
- you are on call, for example, because you are on stand-by for a relief teaching position, and your boss calls you at your house to tell you to report to work.
- you put in effort outside of the typical hours of operation; for instance, you may conduct parent-teacher interviews after regular business hours have ended.
- in school during the summer vacation, getting ready for the upcoming academic year.
The motor vehicle provided by your employer or any other person
If your employer or any other person supplies a car for you and you do not pay for any of the running costs, you are not eligible to claim a deduction for the costs of owning and operating a vehicle.
Even if the expenses are work-related, you are not allowed to take a deduction for any costs that you incur for the direct operation of a car that is provided to you by your employer and that you or your relatives use privately at any time. This is because such costs are included in the valuation of the car for the purposes of the tax on fringe benefits.
It is not possible to get a tax break for the money you spend travelling to another employer to attend a social event there.
You are not eligible to take a deduction for any fines that you have been assessed, such as those for speeding or parking violations.
How to claim your work-related daily travel expenses
Whether the motor vehicle you use is classified as a car or not, as well as whether you own or lease it, are both factors that will determine how you calculate your claims and what records you are required to keep.
Claiming car expenses
If the motor vehicle you drive is a car, and if you are eligible to claim a deduction for your work-related automobile expenditures, you have two options to select from in order to calculate the amount that you are eligible to claim, depending on the type of car you drive.
The two methods are:
- Cents per kilometre
If you use the logbook method to calculate your taxes, you can take a deduction for the amount that your car’s value has decreased (also known as depreciation), up to the value of the car limit.
Cents per kilometre method
Even if you have travelled more than 5,000 work kilometres, you can still utilise this method to claim a maximum of 5,000 work kilometres as a deduction for your travel expenses. For instance, if you have travelled a total of 5,085 kilometres for work, you cannot submit a claim for the additional 85 kilometres driven.
When calculating your deduction using the cents-per-kilometre approach, you do not need receipts or any other written evidence; however, we may ask you how you estimated the number of work kilometres you travelled in order to determine how accurate your deduction is. As an illustration, 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 the purposes of work-related activities. This is because if you perform some of your work from your home office, you are considered to be working from your home office.
You could be eligible to make a claim for:
- depreciation is the process by which the value of home office equipment, such as computers and telecommunications equipment, decreases over time. If the cost of your equipment is less than $300, you are eligible to take a complete deduction for the portion that is work-related.
- calls connected to your job, including calls made from your mobile device to kids on a regular basis while you are away from your place of employment — for instance, you may call the parents of your students to discuss behavioural issues.
- expenses incurred for accessing the internet connection to work
- the amount of money that you have to spend on heating, cooling, and lighting your home office in addition to the amount of money that you would normally have to spend if you did not work from home.
- the expenditures associated with repairing the furnishings and fixtures in your home office
It is reasonable to anticipate that the value of an item that has a finite useful life, such as a computer, will decrease throughout the course of the period that it is in use. This type of asset is known as a depreciating asset.
If you buy something that costs more than $300, the only deduction you can take for it is the amount that it has decreased in value since you bought it.
What you cannot claim
Whether you pay rent or interest on a mortgage, paying council rates and payments for homeowners insurance all count as occupancy expenses.
You are only allowed to deduct costs associated with occupation if the government recognises your home office as a place of business.
In most cases, you will not be able to claim a deduction for your occupancy costs if the only income you receive is the salary you receive from your employment.
Which documents you are required to retain and why
In terms of record-keeping, what kinds of proof are the ATO requesting that teachers keep? Do you need to keep a record of every claim, no matter how trivial they may be?
Teachers are not required to keep receipts for expenses of $10 or less for which they have submitted claims, as long as the total amount claimed for expenses of this type is less than $200. However, in order to be eligible for a deduction, they will need to keep a record of everything. For instance, they could keep a record of it by writing it down in a journal.
Please refer to the information on record-keeping that is available on the ATO website for further details regarding the circumstances under which a teacher is exempt from the requirement to preserve receipts for overtime meals and overnight travel expenditures, including housing and meals.
The Deduction in the ATO’s App is a convenient record-keeping tool that may be used for expenses that the instructor is required to maintain a record of for tax purposes.
In conclusion, what pieces of guidance can you offer educators for the next year in terms of record-keeping that, if followed, will make the procedure simpler the following time it is carried out?
Working out your claim
You have the option of claiming a deduction for the amount of gas and energy you consume as well as the fall in the value of your office furniture by claiming any of the two options that follow:
- a deduction for your actual expenses
- a deduction you work out at a rate of 45 cents per hour.
In order to make a claim under the 45 cents per hour technique, you will need to keep a diary in which you record the amount of time you spend working from your home office. To create a pattern of use for the entire year, the diary needs to display at least four weeks’ worth of information that is indicative of the complete year.
You are not eligible to take a tax deduction for the cost of the laptop if the government provides it to you free of charge as part of an initiative. This is due to the fact that you have not actually incurred the expense.
If you are an employee and have expenses for a uniform, clothing that is particular to your occupation, protective clothing, laundry, or dry cleaning that are related to your job, you may be eligible to claim a deduction for those expenses.
You are eligible to take a tax deduction for the money you spend on certain work-related uniforms or protective apparel, whether you buy it, rent it, fix it, or clean it.
Even if your company requires you to wear a plain uniform or other traditional clothing at work, you are not allowed to deduct the cost of acquiring or washing that clothing because it is considered a private expense and therefore cannot be deducted. This includes money spent on things like:
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.
If your employer-provided you with clothes, uniform, laundry, or dry-cleaning allowance, this does not mean that you are eligible to automatically claim a tax deduction.
You are not allowed to make a claim for costs that were paid for or reimbursed by the school.
A compulsory uniform is a set of clothing that, when worn together, identifies you as an employee of an organisation that has a strictly enforced policy that requires you to wear the uniform while you are at work. This policy mandates that employees must wear the uniform at all times while they are on the job.
You may be eligible for a deduction for shoes, socks, and stockings if these items are required to be worn as part of a recognisable and mandatory uniform and your employer’s uniform policy outlines the characteristics (colour, style, and type) that must be adhered to by the uniforms worn by employees.
The requirement to always dress in the prescribed uniform must be strictly enforced.
Before you are eligible to make a claim for a deduction, the design of the uniform you are required to wear in order to comply with your employer’s request that you do so must first be registered. This is true even if your employer does not strictly enforce the wearing of the uniform.
Single items of compulsory clothing
If you are required to wear a certain piece of identifying clothing at work, such as a sweater or tie, you may be eligible to submit a claim for reimbursement of that item. In most cases, clothing is considered to be distinctive if it does not become available to the general public, in addition to having the employer’s emblem permanently affixed to it.
Non-compulsory uniforms or corporate wardrobe
Imagine that your employer needs or encourages you to wear a unique uniform or corporate wardrobe but does not consistently enforce the wearing of it.
This would be considered a paradoxical situation. If this is the case, the only way you will be able to deduct the price of the clothing from your taxes is if the design of the apparel is registered.
Because stockings, socks, and shoes are not allowed to be recorded as part of a non-compulsory uniform, if you wear a corporate wardrobe or a non-compulsory uniform, you will not be able to make a claim for stockings, socks, or shoes.
If you ask your company, they will be able to inform you whether or not your corporate wardrobe or optional uniform is registered.
You are eligible to take a tax deduction for the money spent on purchasing, renting, replacing, or maintaining protective apparel.
Protective clothing is clothing that you wear in order to protect yourself from the risk of becoming ill or injured as a result of the activities that you engage in to make a living or the environment in which you are obliged to carry out those activities.
A deduction for the expense of clothing that you use at work to preserve your regular clothes from becoming soiled or damaged can also be claimed by the taxpayer. Some examples of this type of clothing include lab coats and art smocks.
Laundry and dry-cleaning
If your work clothes fall into one of the categories listed on this page and you pay to have them laundered and dry cleaned, you may be able to deduct the cost of such services from your taxable income (compulsory uniforms, single items of compulsory clothing, non-compulsory uniforms or corporate wardrobe, and protective clothing).
For instance, you may be able to deduct the cost of cleaning a uniform that your employer supplies and that you are required to wear while you are doing your job duties.
You are able to make a claim for laundry expenses, including those incurred at the laundromat, for washing, drying, or ironing work clothes.
In the event that your claim for laundry expenditures is less than $150, you are not required to provide written evidence; rather, you are permitted to utilise a reasonable premise as the foundation for your claim.
Consider the following scenario: you have a total claim for work-related expenses that exceed $300, which does not include a car, food allowance, award transport allowance, or travel allowance charges; nevertheless, you do claim a deduction for laundry expenses that totals more than $150.
In this scenario, you are going to need documented evidence to support the entirety of your claim. If you have retained written proof to verify your claim, you are eligible to make a claim for the expense of having your work clothes dry and cleaned.
If the total amount of your claim for work-related expenses is less than $300, you do not need to provide any written evidence.
Other common expenses
When it comes to filing taxes, what are some of the more frequent costs that instructors might claim?
The use of a teacher’s personal phone for work-related purposes and the costs of maintaining a home office for work-related purposes are two examples of the kinds of frequent work-related expenses that may qualify for a tax credit (including internet).
They may be eligible to claim a deduction for field trips and school camps that have an educational benefit related to the curriculum and where the teacher had to pay their expenses; first aid courses if they are the designated first aid person; or seminars that relate to their work as a teacher or education professional. In order to qualify for this deduction, the field trip or school camp must have an educational benefit related to the curriculum.
Because their jobs require them to spend extended periods of time outside, they may also be able to file a claim for teaching aids, union and professional fees, and protective items and equipment like sunscreen, sunglasses, and sun hats that they wear while they are working to protect themselves from the risk of illness or injury because their jobs require them to spend prolonged periods of time outside.
Keep in mind that in order for a teacher to be eligible to deduct costs associated with their profession, they must fulfil all of the following requirements:
- They must have used the funds but have not been compensated for doing so.
- It ought to have a clear connection to how they make their living.
- They are required to have a track record to back it up.
- If the expense was incurred for both personal and business reasons, then the only component of the expense that can be deducted is the portion that was incurred for business reasons.
Can educators who further their professional development by enrolling in additional classes or pursuing new certifications deduct the money they spend on their own education from their taxable income?
Expenses related to self-education that lead to a formal qualification can be written off as business deductions. Additionally, the course needs to have a sufficient connection to the teacher’s current job responsibilities, and it also needs to have:
- 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
The costs of a course taken for the purpose of furthering one’s own education are not tax deductible if the course is only tangentially related to the tasks of a teacher or if it helps a teacher find other work.
You may also be entitled to deduct expenses such as union dues, professional association dues and subscriptions, and the cost of books, publications, and journals that are directly linked to your line of work. You may be eligible to get a tax deduction for charitable contributions that you have made to organisations that are recognised as tax-exempt, provided that you have not been given anything in exchange for your contribution, such as raffle tickets or other novelty goods.
You may also be eligible to deduct the cost of income protection insurance as well as any expenses paid to your tax agent for the preparation of your yearly return. This is in addition to the possibility of deducting bank fees imposed on investment accounts.
It is in your best interest, when it comes time to prepare your tax return, to be aware of what kinds of expenses are deductible. Have a conversation with your tax advisor or go to the website of the ATO if you need further clarity regarding what expenses are deductible in order to help relieve the stress associated with tax season. Always make sure to keep a detailed record of all of your documents to assist in making the process of submitting your tax return as simple as possible.