Mythical deductions

Weddings, pets, chocolate… Rumours of what we can and can’t claim on tax have done the rounds for years. We thought it would be fun and helpful to pull together a few examples of “Mythical deductions” and explain what you can and cannot claim in these instances.

Weddings.

What you can’t claim:
Interest on your wedding loan
It’s not uncommon for engaged couples to take out a loan for a lavish wedding. While this may be a sizeable sum, the interest on this sizeable sum sadly cannot be claimed as a deductible expense.

What you can claim:
Donations.
If you donate your wedding dress, donate to the church for your ceremony, or donate surplus food to charity, all of these types of donations might be deductible. You will however need to have the right paperwork to confirm both the value and the Deductible Gift Recipient (DGR) status of the donation.

Pets.

What you can’t claim:
Pets can provide endless entertainment and enrichment. Sometimes you can take them to work, keep them on a job site for company, maybe act as security at night or provide entertainment for visiting clients. But claiming them as a deductible work expense for these reasons can be tricky.

What you can claim:
If your dog genuinely provides value to your business (outside of being cute) you may be able to deduct dog related expenses. A perfect example would be a working dog on a farm. If Kel the Kelpie is spending hours a day rounding up your sheep, you can claim most costs associated with Kel.

Chocolate.

What you can’t claim:
Fundraising chocolates are a great way to raise money for charity while also sweetening our palates! The more you buy, the more you donate! However, while a portion of the money you spend on these chocolates are going to a good cause, you cannot class something as a donation if you received a benefit (such as a Cadbury Twirl) in exchange.

What you can claim:
If you make a pure donation to a charity (and you don’t receive a chocolate in return) this will be considered a deductible donation.

Recovery sessions.

What you can’t claim:
Panadol and Powerade. Nope, not even for a hangover. Athletes often ask if they can claim these as post-training recovery medication. A fair question! But unfortunately, they cannot be claimed.

What you can claim:
What athletes can claim however includes runners, training gear and specific tools required which have been paid for to carry out the training session.

Designer Handbags.

What you can’t claim:
While your $3000 Louis Vuitton might look swanky, and maybe even fit your laptop inside, you cannot claim this luxury item as a deductible work expense.

What you can claim:
A bag which is specifically designed to carry your laptop or work tools can be claimed as a deductible work expense. You can claim an immediate deduction for work related purchases up to $300. If you purchase something for over $300 it may still be claimed over several years, however the ATO may be a little skeptical about claiming a luxury handbag for work purposes!

We hope you enjoyed reading this list as much as we enjoyed putting it together! We love questions, so please feel free to contact us if you’d like to know more!