Strange? Or simply just weird? From guard dogs to sex toys – here are some unusual deductions you can claim on your tax return!
As the financial year is coming to its end, we’ve always wondered about the weirdest tax deductions you can claim in Australia. Forget travel expenses and laundry, we’re talking about the weird and wacky things most don’t even think of claiming back.
Thankfully, Director of tax communications at H&R Block, Mark Chapman, has cleared the confusion and provided us with some sanity at this stressful period of the year. It’s tax time.
As a helpful piece of advice, Mr Chapman says, “The key to maximising that refund is to make sure you’re claiming all the deductions you’re entitled to. Most of those will relate to things you’ve purchased as part of your job or your business. The general rule is that if a purchase is made to enable you to earn income or to operate your business, you can claim a deduction.”
So round up your receipts, lodge your return and soon enough you can enjoy a nice refund cheque from the Australian Taxation Office. But in the meantime, sit tight as we explore the weirdest things Australians can claim on their tax return in 2022!
Admittedly, within the past year, most Aussies have welcomed a furbaby into their homes. However, in Australia, if you’re claiming a dog on taxes, you’re chances are very slim. Like most things, there are some circumstances where a deductible dog could be a possibility. For instance, if you’re wanting to claim a guard dog through your ATO tax deduction, if your business uses a guard dog to keep your premises secure, the guard dog is indeed deductible. It’s regarded as a capital asset of the business and you can claim an immediate deduction for the whole cost using the very generous temporary full expensing tax break. Of course the dog needs to be suitable for the purpose – just as a sheep dog can be used on a farm.
2. Sex Toys
It’s well established that you can claim a deduction for the tools you use in your trade. But, depending on what your trade is, your tools could be very different to the hammers, spanners and drills usually claimed. If you work in the adult industry as a sex worker, you could be looking at a deduction for sex toys, lube and all manner of accessories. You can only claim the business use element of course. If you use them in your personal activities, forget the tax deduction. If you’re an exotic dancer, you could even consider a deduction for fake breasts. Although no one has claimed fake breasts in Australia as of yet, it’s been successfully done in the USA and there’s no reason in principle why it couldn’t be done under Australian law. Expect an awkward conversation with the ATO if you try it though.
3. Entertainment Performance Tools
If you’re a professional performer – whether that be an actor, musician, dancer, magician or circus performer – there are handfuls of strange deductions which you might look at claiming. Mime lessons? Absolutely. The cost of ceremonial swords? Certainly, if you’re a professional sword swallower. Acting classes, dance classes, musical instruments and even tools for magic tricks. If you make a living from stage or on-screen, a whole world of weird, wonderful and interesting items to claim opens up to you.
Most offices have an array of pretty pictures dotted about the place, often in customer focused spaces like reception areas and meeting rooms. Using the temporary full expensing tax break, you could be looking at an immediate tax deduction for your business for that fine canvas you’ve had your eye on. Just make sure it really is used in your business. If the Australian Taxation Office finds out that the picture you claimed for your office reception area is really hanging up in your home, your business will lose the deduction and you may end up paying more tax plus some interest and penalties!
5. PlayStation Consoles, Pool Tables and TV Sets
Again, provided they are used in a business context (perhaps as part of a communal recreation room in a factory or office), they should be deductible. If you just plan to put them in your own lounge room at home however, forget it!
Just remember: the key to claiming any tax deduction is to keep records such as invoices, receipts and bank statements. If you are claiming something unusual, expect to be challenged by the Australian Taxation Office. If the way you earn your assessable income is aligned with the items you’ve claimed a deduction for, you should be okay, no matter how strange it is. If you are ever in doubt about what you can claim, talk to a tax adviser at H&R Block who’ll be able to give you specific guidance on your situation.
Feeling generous? When it comes to Charitable Donations and Tax Time, Here are the Do’s and Don’ts. Before the financial year ends, be sure to read up on these 10 Tax Deduction Facts.