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.
With this in mind, our network of skilled tax consultants have provided a list of the more outlandish claims taxpayers have tried to make over the years. And bearing in mind that we deal with over 750,000 Australians a year, it’s fair to say we’ve seen our fair share of strange claims … and, surprisingly, some were allowable – although plenty weren’t!
A well-known fashion model had undertaken various cosmetic procedures 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 the 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 favour 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. We didn’t allow the claim.
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 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 (the cost is depreciated over several years) and for the costs of keeping it (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 client who “occasionally” took his dog to work to guard his tools and equipment and on that basis tried to claim for the dog’s food, the claim was politely declined. How he guarded his tools and equipment on the days he didn’t take his dog to work, we never found out.
Lots of people try to claim for the cost of traveling from home to work and back again. Usually, they are unsuccessful because the daily commute is regarded as private, not work-related, travel and hence not claimable. The only exception is where you’re required to carry bulky tools and equipment and you have nowhere secure at work to store them. That exception didn’t apply to the hairdresser who tried to claim the daily commute because she had to transport her scissors and clippers, which might have been sharp but certainly weren’t bulky.
Caravaning is a popular leisure pursuit amongst the “young at heart”, but is it possible to claim your caravan as a tax deduction? Surprisingly, the answer might be yes. One client who travelled extensively for work decided to buy a caravan to provide overnight accommodation while working away, rather than paying for a hotel room every night. From a tax point of view, that stacks up to be deductible. But if you are in the same situation and also use the caravan for holidays, you’ll need to apportion the deduction between work use and private use.
A very limited number of taxpayers can claim gym memberships. Among those who can are professional sportspersons, some police officers and some defence force personnel. Bouncers aren’t on the list, so the bouncer who wanted to claim his martial arts course fees was politely declined.
When it comes to tax time this year, many need to realise that there is no one-size-fits-all approach. Every tax return is different, with varying deductions and offsets. Experts are experts for a reason. Due to the ever-changing nature of our world, this year Australians need to visit a tax professional/expert to help them to understand their entitlements, and ensure they are receiving the deductions they are entitled to. Maximise your tax refund.