Let’s be honest. Tax is about as interesting as watching someone watching grass grow. In fact I almost nodded off writing that.
But for small business it’s an imperative process and, while it may sometimes seem laborious, there are a few things you never thought you could claim -- from your dog to anti-glare sunnies to vibrators.
Nicholas Garland, Director of eTaxGlobal, has pulled together a few quirky nuggets to get you in the mood to reevaluate this year’s tax claim.
1. Your dog
Not many small businesses are eligible for this deduction, but it’s a doozy. Partial costs of maintaining a dog that guards your tools or workshop can actually be a tax deduction.
“I had a client who was manufacturing and he had a big workshop outside,” Garland told The Huffington Post Australia.
“He had some stuff stolen from it and he was upset about it. So he bought two dogs, dobermans or something, and he just left them in there. So they were his pets when he wasn’t working but he would leave them in the workspace for the day.
“That’s something you can claim as a security measure.”
Garland said that only a portion of the dogs’ cost could be claimed depending on how often they were used as “work” and what portion of the day they were pets. But this deduction is really geared to tradies.
“As a generalisation I would say that you can’t claim dogs,” he said. “For anything that’s a home office, forget it. When you are working at home, say you’re an architect, it’s a little more difficult to claim your pug.”
2. Firearms and ammunition
Yes, people still legally have guns in Australia and use them, especially for pest control.
“This is mainly for farmers, but you’d be surprised who uses them,” Garland says.
“I have a professional shooter on my books, so that’s all deductible for him.”
3. On-field fines and penalties
This is a curly one. Professional sportsmen and women can actually claim the money they had to fork out for misbehaving while competing.
“Who knew a punch in the face could be tax deductible!” said Garland.
4. Sunglasses, hat and sunscreen
Tradies, pilots, journalists and teachers can claim all of these items as protective clothing if their work required them to be in the sun at any time during their working day. Pilots can also claim more expensive anti-glare sunglasses.
“A lot of the interesting things that you come across are things that are personal in nature that people just assume are personal,” Garland says. “But if they are useful for work purposes and people don’t think about claiming them. The personal expenses that you can push over to being business expenses are the interesting ones.”
Speaking of the personal spilling over into the workspace, adult industry workers get to claim a bunch of stuff that others don’t. Sex toys are a start, but dance lessons and stage make-up are also legitimate tax deductions.
“I had to add this for the can-you-believe-it factor,” Garland said.
Airline employees can claim a deduction for the cost of hydrating moisturisers and hair conditioners used to combat the abnormal drying of skin and hair when working in the pressurised environment of an aircraft.
But not all airline employees will benefit.
“If you’re a ticket operator on the ground for an airline -- you can’t claim moisturiser because you’re not up in the air,” Garland said.
7. Analogue watches
This may seem an old-fashioned one but pilots are required under civil aviation laws to carry an analogue watch while flying for safety reasons.
8. The cost of making up cash or bar shortages
This isn’t your regular run-of-the mill deduction either. Businesses facing a cash shortfall at the till or an employee who makes up the difference out of their own money can claim this on their tax.
“I don’t advise people to put this one in a lot as it has the ability to be abused pretty quickly,” Garland said.
9. Home phone rental
If you operate your business at another location or you’re an employee, your home phone rental can be claimed if you are at home and on call. Most people might say: “What home phone?” but most of the new NBN plans come with a bundled home line package so people are starting to hook up landlines again.
Most common errors claimed as tax deductions
Garland said there were many things most people assumed could be claimed, but they’re wrong. Here are a few of them.
Mileage from home to the office
Unless you are carrying bulky items between your home and your office, this is a no-go at tax time. You’re expected to make your way to work on your own dime.
Gym shoes for personal trainers, generic black pants and white shirts commonly required by employers for hospitality staff are also off limits.
“The ATO did a tax determination and wrote a ruling which said you can’t claim anything that you use personally for work,” Garland said. “So if you require a black top to go and wait at a bar and you have to go and buy it from Myer, because it is a general-use piece of clothing, you can’t claim it for work.”
Makeup for airline employees
They may be able to claim hydrating shampoo but makeup isn’t tax deductible for the same reason as the hospitality shirts.
“The ATO says you can’t claim makeup because even though you’re expected to look nice and well presented, makeup is used for personal use anyway,” Garland said.
Emergency services personnel such as firemen and policemen need to be fit in order to do their jobs properly, but gym memberships are off the table unless they are in a special department that requires an increased elite fitness level.
Parking and parking fines
The cost of parking during work hours after you have driven to work is at your expense, says the ATO. And don’t even think about claiming a parking fine -- the tax office is much more lenient on fines for professional athletes than small business owners.
Cleaning your suits or everyday clothing that is worn to work isn’t claimable either. So cut down on the dry cleaning if you want to save some cash.
If you choose a University or TAFE course that is not in the same line of work as you are currently in but want to get a job in or start a business in, then those costs must be borne by you.