You may be wondering what you can deduct in your tax return. We all know the deductions for work-related travel and laundry costs for a uniform, but what else can you deduct?
I’ve trawled through the ATO’s Register of Private Binding Rulings to find some of the stranger deductions that taxpayers have been allowed.
The cost of keeping man’s best friend can be a deduction.
Many business owners who keep guard dogs on their premises have been granted a Private Binding Ruling by the ATO to allow deductions for the cost of acquiring and maintaining (ahem … feeding) a guard dog. These include truck drivers who transport cattle, business owners with expensive plant and equipment that is vulnerable to theft.
Dog trainers who show off their especially well trained pups as part of their business can even claim a deduction. However, the deduction is only available for a percentage of the ‘business function’ of the dogs, and not for their ‘private use’. All work and no play makes Fido a very unhappy boy.
The ATO appreciates a good spray tan, particularly on a buff young fitness model.
Some taxpayers who earn an income by competing in professional athlete competitions have been given the go ahead to tan safely, and claim it on their tax. However, this is only for tanning that is undertaken at the time of a competition – not day to day tanning. In the ATO’s own words ‘spray tanning is not something normally undertaken to maintain a high standard of appearance compared to make-up and hair styling’. Okay then.
An employee of a media company was allowed to deduct part of a pay TV subscription. The employee was responsible for selling sponsorship and promotions to advertisers, so the ATO agreed that some part of the pay TV subscription was work related. However, the taxpayer was required to keep a logbook of their viewing so that they could apportion the expense between work related and private use.
If you’re in the circus or other performing arts and find yourself in need of a physiotherapist, the ATO might allow you to deduct that cost. In many cases, the ATO has accepted that chiropractors, massage therapists and physiotherapists are all essential to those whose fitness and strength is a requirement of their day-to-day job.
Getting a Private Ruling for your own situation
If you’re not sure about whether you can claim a deduction in your tax return, then a Private Ruling is a great way to get certainty. You can write to the ATO (using an approved form), explain your circumstances and why you think you are entitled to a deduction. The ATO then considers this and makes a decision about whether you can claim that amount.
As long as you act in accordance with the Private Ruling decision, the ATO cannot later change its mind. This means that you can proceed with certainty when lodging your tax returns.
Hartigan Law specialises in helping taxpayers stay on the right side of the ATO. If you’re thinking about applying for a Private Ruling, then call me on 1300 75 84 84 or get in touch with me here to arrange a consultation. No matter where you are in Australia, I can help you.
This article is not legal advice. It’s a brief summary of a very complicated topic.