Tax Deductions for Teachers

(last updated 23/04/2014) 

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If you work as a teacher, here is a checklist of tax deductions you may be able to claim on your personal tax return.

Teaching Aids

A deduction is allowable for the cost of teaching aids to the extent they are used for work-related purposes. 

See this post for details of claiming a tax deduction for Teaching Aids.

Car Expenses from Home to Work

The cost of travel between home and your place of employment is usually considered private and not deductible.

However, there are a number of cases and circumstances where travel between home and employment is an allowable deduction:
  • Travel between home and work - A deduction is not allowable for the cost of travel between home and the normal work place as it is generally considered to be a private expense. This principle is not altered by the performance of incidental tasks en route.
  • Travel between home and work - transporting bulky equipment - A deduction is allowable if the transport expenses can be attributed to the transportation of bulky equipment rather than to private travel between home and work. A deduction is not allowable if the equipment is transported to and from work by the cleaner as a matter of convenience. A deduction is not allowable if a secure area for the storage of equipment is provided at the workplace - see this post for more details Travel Between Home and Work with Bulky Tools and Equipment.
  • Transport of Students -  A deduction is allowable for the cost of travel attributable to the transport of students in the course of producing assessable income. This is so, even if the travel begins at the employee teacher's home and ends at his or her regular place of employment. The cost of the total distance travelled (beginning at home and ending at school) is allowable.
  • To second job - A deduction is allowable for the cost of travelling directly between two work place - from one employer to another second job.This also applies to travel from work to a place of business where you are engaged in work related activities
  • Between Work Places - A deduction is allowable for the cost of travel from a your normal work place to other work places. The cost of travel from the alternative work place back to the normal work place or directly home is also an allowable deduction.
  • Home to Alternative Work Place - A deduction is allowable for the cost of travel from home to an alternative work place. A deduction is also allowable for the cost of travel from the alternative work place to the normal place of employment or directly home
  • Between Home and Shifting Places of Employment - A deduction is allowable for the cost of travel from home where you:  (a) do not work to any regular pattern; (b) there is no long term plan by which you can predict what will be required of you in the future; (c) there is no certainty as to the range of work locations you will attend over a period. 

What Car Expenses Can I Claim?

  • The cost of using your own car for work, including travel to attend meetings, attend training courses, pick up supplies and driving between or around job sites (to claim for car costs it is usually best to keep a diary record of the number of kilometres you travel during the year for work purposes and then we can calculate the amount of your tax deduction at the end of the year)  - see Claiming Work Related Car Expenses.
  • The cost of parking, tolls, taxis and public transport if you are required to travel to attend seminars, meetings and training courses not held at your usual place of work (if you need to stay away overnight you can also claim for the cost of all meals and your accommodation)  
  • The cost of bridge and road tolls paid while driving between your depot and your client’s depot (but NOT while driving to and from work)
  • You can claim the cost of using your own car to travel to and from work, BUT only if you are required to carry bulky tools and equipment for your work AND there is no secure area to leave these items on site overnight.
For a checklist of when travel is not an allowable tax deduction see our post Claiming Work Related Car Expenses.

Training

  • The cost of work-related short training courses (for example first aid, OH&S, truck and heavy equipment driving, vehicle maintenance) that are not run by a University or TAFE. You can claim for the cost of any course fees, books, stationery, Internet connection, telephone calls, tools or equipment and travelling to and from the course. You can also claim any accommodation and meal expenses you have to pay if you are required to stay away overnight for your course
  • The cost of self-education courses run by a University (not including HECS/HELP fees) or TAFE that directly relate to your current work. If you are studying you can also claim for the cost of books, stationery, equipment and travel required for your course
See this post for details on claiming a Tax Deduction for Self Education.

Home Office Expenses

If you perform any employment activities from home there are some expenses that can be claimed on your tax return. Ideally, you should have a room set aside as a home office.

Home office expenses for an employee is intended to account for "running" costs, which relate to the use of the facilities in the home.

Method of claiming home office expenses:

Although the diary method that records actual running expenses relating to performing work in your home office may give a more accurate calculation of home office expenses, our clients almost always choose the Tax Office set rate per hour method.

Using this method you can apply a fixed rate per hour based on the number of hours you use the home office. This method is intended to account for the cost of electricity and depreciation of office furniture, equipment and computers.

For the rate applicable to home office expenses and more information on claiming a tax deduction see our post Claiming a Deduction for Home Office Expenses.

Agency Costs

  • Agency commissions - A commission payment to a agency is usually met by the employer and a deduction is not allowable. If you actually incur the cost then a deduction is allowable
  • Agency fees - A deduction is not allowable for upfront fees, joining fees or search fees paid to a agency
  • Agency Teachers - A deduction is not allowable for the cost of obtaining employment through an agency, including preparation of resumes, calls to the agency as well as telephone/mobile rental, beepers, pagers and answering machines used for contacting the agency. A deduction is also not allowable for the cost of travel to and from employer hospitals, clinics, etc. A deduction may be allowable where you are actually employed by the agency.

Work Clothing  

A deduction is allowable for the cost of buying, renting or replacing clothing, uniforms and footwear ('clothing') if:
  • the clothing is protective in nature
  • the clothing is occupation specific and not conventional in nature
  • the clothing is a compulsory uniform and satisfies the requirements of Taxation Ruling IT 2641 - for example corporate wardrobe
  • expenditure on shoes, socks and stockings is essentially of a private nature and, even when these items are worn at the request of the employer, their cost will only be deductible in limited circumstances. To qualify for deduction, the items must firstly form an integral part of a distinctive and compulsory uniform the components of which are set out by the employer in its expressed uniform policy or guidelines. In addition, the employer's uniform policy or guidelines should stipulate the characteristics of the shoes, socks and stockings that qualify them as being a distinctive part of the compulsory uniform, e.g., colour, style, type, etc. The wearing of the uniform must also be strictly and consistently enforced, with breaches of the uniform policy giving rise to disciplinary action. It is only in strict compulsory uniform regimes that expenditure on shoes, socks and stockings is likely to be regarded as work-related rather than private in nature
  • the clothing is a non-compulsory uniform or wardrobe that has been entered on the Register of Approved Occupational Clothing of the TCFDA. Details of registered corporate wardrobes can be obtained either from your employer or from the Department of Industry directly on 03 9268 7944. NOTE, there is no longer a public register available on the web. See out post on Non-compulsory Corporate Uniform for additional information.
  • A deduction is allowable for the cost of cleaning, laundry and maintaining clothing that falls into one or more of the categories of deductible clothing above

Meals and Travel  

  • The cost of buying overtime meals when you work overtime, provided you have been paid an allowance by your employer. Providing the deduction for overtime meals does not exceed the ATO's reasonable allowance, substantiation is not required - for the current rate see Claiming Overtime Meal Allowance.
  • The cost of meals and incidental expenses when you are required to stay away from home overnight for work (if you receive an allowance from your employer, you can claim the full amount of that allowance provided it is shown on your PAYG payment summary). If you didn’t receive an allowance, you should keep receipts to prove the amount you have spent on all meals and accommodation  
  • The cost of parking, tolls, taxis and public transport if you are required to travel to attend seminars, meetings and training courses not held at your usual place of work (if you need to stay away overnight you can also claim for the cost of all meals and your accommodation)  
  • The cost of parking fees, bridge and road tolls paid while driving the truck between your depot and your client’s depot (but NOT while driving to and from work)  
  • The cost of using your own car for work, including travel to attend meetings, attend training courses, pick up supplies and driving between or around job sites (to claim for car costs it is usually best to keep a diary record of the number of kilometres you travel during the year for work purposes and then we can calculate the amount of your tax deduction at the end of the year) 

Other Allowable Work Expenses 

  • Parking - A deduction is allowable for parking fees (but not fines) and tolls if the expense is incurred while travelling:
        (a) between two separate places of work;
        (b) for self education purposes (if the self education expenses are an allowable deduction);
        (c) in the normal course of duty and the travelling expenses are allowable deductions.
  • The cost of annual memberships or union fees 
  • The cost of teachers registration and other practicing certification
  • Computers, calculators and electronic organisers - A deduction is allowable for the work-related portion of depreciation on the purchase price of these items
  • The cost of work-related books, magazines and journals   
  • Conferences, seminars and training courses - A deduction is allowable for the cost of attending conferences, seminars and training courses to maintain or increase a your knowledge, ability or skills in the teaching industry. There must be a relevant connection with your current work activities
  • First aid courses - A deduction is allowable if it is necessary to undertake first aid training to assist in emergency situations. If the cost of the course is met by the employer, or is reimbursed, no deduction is allowable
  • Self education expenses - A deduction is allowable for the cost of self education if there is a direct connection between the self education and the current income-earning activities. Self education costs can include fees, travel, books and equipment
  • The cost of work-related mobile or home telephone calls and rental (you should keep a diary record of the number of phone calls you make for work for one month and then we can use that to estimate your usage for the whole year)  
  • The cost of work-related Internet connection fees (you can only claim the proportion of your monthly fees that relate to work use, which could include emailing, research relating to your job and research for your training courses).

General Expenses

There are some tax deductions that all employees can claim on their personal tax returns which include:
  • The amount of any donations to registered charities (as long as you haven’t received anything in return for your donation, such as raffle tickets or novelty items) 
  • The cost of bank fees charged on any investment accounts 
  • The cost of income protection or sickness and accident insurance premiums (this type of insurance covers you if you hurt yourself (including when you are not at work) or become sick and you are unable to work. It will pay you your normal wage until you are fit to return to work – if you don’t have this insurance you should see a financial adviser or ask us and we will refer you to someone who can organise it for you. It is definitely worthwhile) 
  • Your tax agent fees (the amount you pay to your accountant to prepare your tax return each year) 
  • The cost of travelling to see your tax agent (you can claim the cost of travelling to see your accountant to have your tax return prepared. You should keep a record of the number of kilometres you travel and any other incidental costs such as parking, meals, accommodation etc)
We suggest that you keep receipts for all purchases that are work related, even if they are not listed above. That way, when we prepare your tax return, we can decide whether you are allowed to claim a tax deduction for them or not.

Reimbursements

If an employee teacher receives a payment from his or her employer for actual expenses incurred, the payment is a reimbursement and the employer may be subject to Fringe Benefits Tax. Generally, if an employee teacher receives a reimbursement, the amount is not required to be included in his or her assessable income and a deduction is not allowable (see Taxation Ruling TR 92/15).

However, if motor vehicle expenses are reimbursed by an employer on a cents per kilometre basis, the amount is included as assessable income of the employee teacher. A deduction may be allowable for the actual expenses incurred.

If the reimbursement by an employer is for the cost of a depreciable item (e.g., tools and equipment), a deduction is allowable to the employee teacher for depreciation.

If a payment is received from an employer for an estimated expense, the amount received by the employee teacher is considered to be an allowance (not a reimbursement) and is fully assessable to the employee teacher.

See this post for details on Tax deductions, Employer Reimbursements and Allowances.

For further details on what teachers can claim as a tax deduction see this ATO summary.

See this free fact sheet/checklist of tax deductons for teachers (pdf)- Tax Deductions for Teachers.

E-tax Return

See these posts with tips, calculators and checklists to help you prepare your eTax Return (and get a better refund) with less hassle:
For help with your eTax return see our eTax Return Checklist.

Web Based Tax Return App:

A benefit of using eZtax, our web based tax return app, is we have the genuine online tools, knowledge and experience to get the best tax refund for our clients, making it easy to complete your annual tax return online.

Our Web Based Tax Return App will step you through all the necessary questions to increase your  tax refund and take into account all relevant tax deductions and tax offsets. Try it now. Its FREE to get started! 

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