Written by Drew Streitberg,
Once again the ATO have advised practitioners that they will be scrutinising taxpayer deductions specifically relating to uniforms, occupation specific or protective clothing, laundry and dry cleaning expenses.
Whilst there is a $150 upper-limit with regards to not requiring written evidence, it is not a standard deduction.
In order to claim an expense without written records it must be in relation to a uniform, protective and/or occupation specific clothing that you were required to wear as part of your employment.
To assist people in this regard, the ATO has maintained simple calculations available to anyone on their website for some time. The formula specifically relates to laundry and states a claim of $1 per load if the load is made up solely of work-related clothing or $0.50 per load if it is a mixed wash.
It would be recommended that you also consider holidays and so a standard calculation would be based upon 48 weeks in a year rather than 52. This equates to either $144 or $72 depending upon your claim type.
Remember, anything above $150 and you will require evidence and receipts to support your claim.
If you also recall, the ATO maintains a standard $300 deduction limit that doesn’t require written evidence across D1-D5 (work related expense categories), the D3 $150 is included within this $300. Many taxpayers believe it is in addition to this. It is not.
Remember, anything over $300 and you will require evidence for ALL expenses including those at D3. At D3 if you exceed $150 in itself you will require evidence of the claim.
At D3 you can claim deductions for:
- Uniform costs (as part of an approved uniform, outlined by the company and registered);
- Dry cleaning
- Specified protective clothing
It must be in connection with your work. You cannot claim deductions for normal clothes where you were instructed by your employer to wear certain colours, fashions or non-uniform approved clothing.
Remember, the key is you are incurring an expense directly related to your employment that you cannot be reimbursed for.
If in doubt, maintain records and contact us to discuss it further to ensure you aren’t hit with a nasty surprise later.