While you may have heard that some work clothes are eligible for your tax return, did you know that you could also claim costs for cleaning it?
Work-related clothing is typically purpose-made, such as occupation-specific clothing, protective clothing and unique distinctive uniforms. So sometimes they are a little harder to clean than regular clothes. That’s why the government allows tax-deductions for work-clothing cleaning. It includes costs of washing, drying and ironing eligible work clothes, or having them dry-cleaned.
Eligible work clothing
There are a number of rules that make some clothes you use for your employment eligible of ineligible for these tax deductions. There are occupation-specific clothes that are not everyday in nature and allows the public to easily recognise your occupation. There are protective clothes that specially designed to provide you protection against a work environment risk to a certain degree. And finally, there is work uniform, designed and made by your employer that helps identify you as an employee of the organisation you are working for. The Australian Taxation Office (ATO) has numerous guidelines for work-clothes eligible for a tax return deduction – even outlines for specific industries. So if you are unsure, check with your trusted Melbourne tax accounting partner.
Evidence required for the claim
To claim laundry expenses greater than $150, you will need to have written evidence for them, such as diary entries and receipts. You will also need this evidence if your total tax deduction claim on work-related expenses exceeds $300 – but excluding expenses for allowances on cars, meals, award transport payments and travel. This $300 threshold also applies for dry-cleaning expense deduction claims as well.
If your work-related clothes cleaning claim is under those limits, you don’t need to provide written evidence. However, make sure you have a reasonable basis to work out your claim amounts. The ATO recommends estimating $1 per full load of work-relating clothing for washing, drying and ironing. But if the laundry cost is mixed with your regular items, an estimate of 50 cents per load is suggested.
Tax deductions for work clothes are there to help Australian employees in the job and are not to be taken advantage of. But to be sure you are paying a fair tax rate, it is important to keep work-related receipts and records – even if it is just the usual cleaning of your work clothes. If you have a good accountant in Melbourne helping you with your tax return, they will know what to do with the paperwork.