The financial year is coming to a rapid and welcome end. We all know what that means: time to lodge your tax return. It may be a bit of a chore, but once you’ve seen these off-the-wall tax deductibles that you may never have considered before that rebate is going to feel even sweeter than usual.
For some lucky Aussies, tax returns probably aren’t a major concern: if you’re flogging your coastal home for a cozy $50 million or having $3 million supercars craned into $39 million penthouses, you probably don’t need that extra bit of cash to spend on your next holiday or pay off some grumbling debts.
For us mere mortals, however, the little lump sum that (hopefully) comes with filing our tax returns can make all the difference – and any way we can pump up that sum is welcome news indeed.
Enter Mark Chapman, Director of Tax Communications at H&R Block, who sat down with us to reveal some of the lesser-known and downright strange tax deductibles that could help you out later this month….
WATCH: Thinking of spending those tax savings on some wrist candy? Choose wisely…
Before we get into the weird and whacky deductibles, it’s worth reviewing some of the basics. Chapman reminds us that “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” and, even more importantly:
“The key to maximising that refund is to make sure you’re claiming all the deductions you’re entitled to.”Mark Chapman
Most of those things will be your mundane, everyday business costs. Some, however, might be just a little bit spicier. Here’s our rundown of the obscure deductibles to keep on your mind this end of financial year…
It’s already well known that you can claim the tools of your trade as tax deductibles but, depending on what exactly your trade actually is, these could look very different to the hammers, spanners, and drills that tax accountants usually see slide across their desk…
“If you work in the adult industry”, says Chapman, “you could be looking at a deduction for sex toys, lube and all manner of ‘accessories'”. Obviously, you can only claim the business use element of these goodies; if you use them in your *ahem* personal activities, tax deduction is off the table.
Don’t get ahead of yourself here: your gorgeous little Goldendoodle might not make the mark for this one, but there are circumstances where a delightfully deductible dog is an option for you:
“If your business uses a guard dog to keep your premises secure, a dog is indeed deductible.”Mark Chapman
In this instance, the dog may be “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”.
The important part here is that the dog really needs to be suitable for the purpose you’re claiming it’s used for: “A poodle is unlikely to cut it. The same logic applies to dogs used on a farm, such as a sheepdog.”
If you own a rental property, you’ll likely be au fait with the many usual deductions up for grabs: mortgage interest, rates, repairs, and the like. But, did you know that you can claim for items that improve your property’s “street appeal”? Chapman reveals all…
“Whether you think garden gnomes do that or not is really a matter of personal taste but several clients have successfully claimed them in respect of their rental property.”Mark Chapman
Chapman does have an important addendum to this one, however: “make sure the gnomes are actually for your rental property; if they turn up in the garden of your family home, they are not deductible!”
If you’re a professional performer — actor, musician, dancer, magician, or “even circus performer”, adds Chapman — there are all manner of strange deductions you could look at claiming.
We asked Chapman for some of his strangest but most poignant examples: “Mime lessons? Absolutely. The cost of ceremonial swords? Certainly, if you’re a professional sword swallower. Acting classes, dance classes, musical instruments, magic tricks….”
“If you make a living from stage or screen, a whole world of odd and interesting claims opens up to you.”Mark Chapman
The Bottom Line
Good record keeping is the key to claiming any tax deduction — receipts, bank statements, invoices, you name it. If you’re going to claim one of these weirder deductibles, expect to be challenged by the ATO but, far more importantly, be confident in golding your ground.
Chapman summarises nicely: “If the way you earn your assessable income is aligned with the items you’ve claimed a deduction for, you should be OK, no matter how strange it is.”
So there you have it folks, a fully qualified accountant has given you the green light to deduct your d*ildos, dogs, and every kind of magic wand at your disposal. Remember, if you’re a little scared to take on the tax return yourself, you can always reach out to a pro.