Can I claim my wardrobe as a tax deduction?
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HANNAH COLE LYRICS
It’s tax time.
Editor’s Note: The information below is general in nature and does not constitute financial advice. For help with tax time, hire a qualified accountant or tax professional.
As I type the word “tax,” I can already hear the collective groans nationwide. Yes, death and taxes are the only sure things in life – a terribly sad saying, in my opinion.
Without an accounting degree, navigating your tax return can be a real minefield, especially if you’re self-employed or own a business. It’s like you have to be aware to understand what you can claim a tax deduction on and there are so many numbers and receipts to follow.
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Having spent much of my working life in an office, albeit toiling for companies without strict dress codes, I always wondered if you could claim part of your work wardrobe on tax deductions. I spoke to Christina Hobbs, CEO and co-founder of Verveto finally end the interrogation.
First, what tax deductions could I miss?
As Christina tells me, Australia’s tax system “is a bit complicated compared to other countries”, so there are probably some advantages we are missing. As a helpful guide, she suggests checking the OTA website, which offers great information for beginners in an easily navigable way. For those with simple tax returns, all burning questions should be answered.
As for tax deductions that are often overlooked or overlooked, Christina offered a helpful list to keep in mind:
- The cost to prepare your tax return last year (if you used a tax agent).
- Income protection insurance premiums (if the policy is in your personal name and not in your pension fund).
- Professional development and self-study expenses, which may include short courses, formal studies, or content-based training.
- Specific memberships or licenses you must hold in your role (to exercise or join a trade union or industry body).
It is important to note that all expenses deducted must be paid with your own money (and not reimbursed by an employer) and are directly related to helping you earn income. And keep the documents proving those purchases for five years in case the ATO selects you for a random audit.
So, can I deduct my wardrobe costs?
I spend a pretty penny on my wardrobe every year (although, let’s be honest, working from home has made me question where I will actually wear all these new and glamorous pieces). Even though I expected this to happen, I was still saddened to learn that none of these very large purchases would result in the reduction at tax time. As Christina tells me, the eligibility to do this is quite restrictive.
“If we are wearing non-protective or ordinary clothing (such as jeans, shirts, skirts, shorts, pants, socks, heels and closed shoes) that we might also wear outside of work, we will not cannot claim a tax deduction for them, even if our employer requires us to wear them or follow a specific dress code,” she explains.
You may only qualify if you are required to wear a distinctive uniform featuring your employer’s logo or occupation-specific patches that would not be worn off the job. For example, if you are a police officer, medical professional or supermarket employee, certain elements may apply. Any protective clothing worn to prevent injury or illness while on the job may also be acceptable, including steel hooded boots for trades and non-slip shoes for nurses.
“Even if you work in a clothing store and are required to wear clothing from that store, you still cannot claim the cost of [the] clothes you bought,” says Christina. As a general rule, “if you can wear the clothes outside your workplace, you are unlikely to be able to claim the purchase, repair and cleaning of them”.
According to the ATO’s website, you also cannot claim a deduction if your employer is the one who buys, repairs, replaces, and launders your work clothes, or reimburses you for expenses you incur on or for said work clothes.
So it seems to claim your last dopamine-enhancing aspect is probably irrelevant. But, as always, be sure to seek professional advice on your particular situation.
To learn more about clothing tax deductions, try this.