Wage and Rental Property Deduction Categories

A client recently asked for a list of expense categories, to help prepare for her 2012 tax rerturn. She also wanted some guidance on her rental property expense categories.

You would think that kind of summary would be readily available. Whilst we have separate summaries of work related expenses and rental property deductions, we actually don’t have a combined summary. So here goes:

Work related deductions: 

• Work related car expenses – eg, transporting stock between stores, deliveries, visiting clients/customers; 
• Work related uniforms/clothing – cost of replacing uniforms or protective clothing, including laundry, safety steel cap boots; 
• Other work related expenses – union fees or professional memberships, tools, safety equipment, depreciation on tools over $1000, phone, tolls, insurance (eg audit insurance), stationery. Sundry expenses: Donations Cost of preparing last year’s tax return, including travel.

PS – don’t forget, to be an “allowable” deduction, the expense must be related to your income earning activity – for example, a butcher can deduct the cost of a knife, but not the cost of piano lessons. 

Rental Property: 

• Borrowing costs (loan application fees, mortgage insurance). 
• These items can be amortised over 5 years or the term of the loan, whichever is shorter. 
• Body corporate fees 
• Rates 
• Water charges 
• Insurance Interest expenses 
• Pest control Management costs (real estate agent) 
• Travel related to collecting income, inspections or reparis 
• Telephone, stationery, postage 
• Bank fees (many banks these days charge an annual fee) 
• Capital Allowance (depreciation on plant, fixtures and fittings) – may be beneficial obtain a depreciation report from a Quantity Surveyor. 
• Capital works (special building write-off) – may be beneficial obtain a depreciation report from a Quantity Surveyor. PS – You may find it helpful to read my ebook on taxation and rental properties explained here

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