Tax 2020: What can freelancers claim?

by Rachel Smith
26 June 2020

As EOFY looms, we’re all either excited to do our tax, or wondering just how long we can put it off for (til October 31, incidentally).

There have been some changes for employees who’ve worked from home during the pandemic, and for freelancers who’ve accessed their super or Government payments such as JobKeeper or JobSeeker.

What are the changes?

Your super If you accessed your super via the early release scheme offered during Covid-19, those amounts are tax free and don’t need to be declared on your return.

JobKeeper / JobSeeker If you’re a sole trader and you lost all your work or were down by 30 percent this financial year, you may have applied for one of the Govt payments. These do need to be declared as income in your tax return.

What are the rules for claiming expenses?

The ATO‘s rules for any expenses you claim are:

·      You must have spent the money yourself and weren’t reimbursed
·      It must be directly related to earning your income
·      You must have a record to prove it.

If the expense was for both work and private purposes, you can only claim a deduction for the work-related portion. However, if the expense was related to voluntary work you cannot claim a deduction. 

While travel and vehicle expenses may be stretching your friendship with the ATO (unless you are a travel writer) there are a ton of legitimate expenses you may be missing out on. Sure, we all claim for our landline and a large chunk of our internet usage – but are you submitting your mobile phone receipts as well as repairs or maintenance on your home office desks, chairs, lamp, foot rest, air con/heater, computer screens?

Other expenses you can claim include:

Make-up. Well, make-up related to work only (sorry). So, if your concealer contains SPF and you’re a photographer or environmental journo who spends a lot of time on the road working, definitely claim it.

Work bags. If you’ve bought a super expensive bag to cart around a laptop, mobile phone, pens and a notepad, it’s claimable.

A cleaner. With a designated workspace you can claim a percentage of your home clean.  The same goes for having items you use for work repaired and or cleaned.  Check out the Home Office Calculator to find out what you can claim on the above, or for water, heating, cooling and lighting.

Pay TV. Like magazines and trade periodical subscriptions, if you can prove that you need to keep abreast of industry news in say finance and need SKY News then definitely tot up those receipts.

Sunglasses and sun-hats. If you’re regularly working outdoors and need sun protection then you can claim it.

Dry-cleaning. For those of us with corporate clients that requires digging out a suit every now and then, don’t forget to look into claiming your dry-cleaning or laundry expenses.

Software. Can’t stand your out dated Windows or Adobe packages? Consider upgrading them, knowing that for the percentage of time you use it for work can be deducted from your income.

Life insurance premiums. If you pay premiums through your super fund, they are tax deductible. 

Rachel’s List membership fees. And other professional associations like MEAA union dues – these are all tax deductible.

Still unsure of what you need to declare or what you can claim? Chat to a tax agent or accountant.

Rachel Smith

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