ATO tax deduction to take advantage of before June 30: 'Better off'

Yahoo

a day ago

Tax time is just around the corner, and many Aussies will be looking to make some last-minute purchases to help maximise their returns. An accountant has revealed one common item that you'll generally be able to claim a tax deduction on: your work bag.
The Australian Taxation Office (ATO) allows taxpayers to claim a deduction for a handbag if they purchase it to carry work items, such as a laptop, tablet, work papers or diaries. Your bag will need to be suitable for carrying work equipment, mainly used for work, plus you'll need to have records to prove your purchase.
Aussie tax guru Kiki told Yahoo Finance that if you used the bag for personal purposes, you'll need to apportion the cost between work and personal use accordingly.
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'The other thing is the value of the bag itself. Normally, with any work-related expenses, anything less than $300 is immediately tax deductible,' the accountant said.
'But if it's over $300, then you have to depreciate it. Let's say the bag is for $500, then you have to depreciate it over its useful life.'
Kiki said people who claimed luxury bags would sometimes raise eyebrows.
'Are you really using that expensive bag for work? And if you are, are you only using it for work and not using it for personal reasons?' she said.
If you are able to establish that you use the bag for work, you can only tax deduct the portion that is used for work.
'So if I buy a Louis Vuitton bag, I can't claim the full amount as a tax deduction, because there's a high chance I also use that bag on the weekend,' she said.
'Since it's likely over $300, I'd also need to depreciate it over its useful life rather than claim it upfront.'
The ATO said you can't claim a deduction for bags or cases if you mainly used them for private purposes, such as carrying your lunch. You also can't claim if someone else supplied you with the bag.
Along with being able to claim a handbag in selected circumstances, the ATO lets you claim briefcases, laptop bags, satchels and luggage.
You can find out more about the rules here.
If you're looking for ways to maximise your tax return, bringing forward tax-deductible purchases could be worth considering.
That could be things like a new desk or monitor for your home office, any subscriptions you use for work, or work-related technology.
'Whether it's a bag or stationery or a new phone for work, you're better off buying it before 30 June because you can tax deduct it in your 2025 Australian tax return,' Kiki told Yahoo Finance.
Spending on an investment property, such as a depreciation report, or even engaging an accountant to do your tax return can also be tax deductible.
'If you are looking to engage an accountant, consider engaging them before 30 June, pay them the fees so that you can claim that fee in your tax return,' Kiki said.
If you prepaid $2,000 worth of tax-deductible expenses, for example, and your income was above $45,000, your tax rate would be at least 32 per cent. That means you'd get an extra $640 back in your refund as a minimum.Sign in to access your portfolio