Tax Deductions you are entitled to as a member of the Australian Defence Force
It is common for members of the Australian Defence Force (ADF) to incur expenses while on duty. It is important you understand what you can claim and what you can’t. Knowing the tax deductions you are entitled to can make a substantial difference on your final tax outcome. Here is what you need to know when preparing your tax return as an ADF member:
CAR AND TRAVEL EXPENSES
You are entitled to claim a deduction for all expenses associated with using your car if used to perform duties within your role in the Australian Defence Force. All claimed expenses should be provable with records of travel using your vehicle, including dates, activities, places, times and duration’s.
Travel expenses related to work may be claimable as well. Travel between bases, within base, travel from the base to another location and travel between workplaces is also claimable, as long as it is required for work and neither location is your home. Claiming travel between work and home is possible, but only if you carry bulky work related tools or equipment which cannot be safely stored overnight at work.
To accurately claim car and travel expenses, two record keeping methods are accepted: Cents per Kilometre or the Logbook Method. The most common method used by Defence Force members is Cents per Kilometre travelled, with a deductible rate of 68 cents for every kilometre of travel. This deductible has a limit of 5,000 work kilometres travelled per car. Any excess kilometres travelled per car is unclaimable. Receipts and other written evidence is not required to prove your claim. However you must have a journal or log of work-related travel to show how you calculated the total kilometres claimed.
WHAT YOU CANNOT CLAIM
You cannot claim the cost of travel between work and your place of residence unless you also transport bulky equipment in your vehicle which cannot be stored safely overnight at your place of work.
CLOTHING, LAUNDRY AND DRY CLEANING EXPENSES
If you are given a uniform allowance it should be included as income on your tax return. However you are still entitled to claim deductions for the purchase, repair, maintenance and laundry of your military uniform.
Military uniforms are deemed as compulsory by the ATO, which means you can claim certain other items:
- Shirts with rank or other embellishments which are an approved color
- Approved matching pants and trousers
- Military regulation jackets
- Official mess uniform
- Head wear, such as hats or caps with rank or embellishments
- Dress shoes
- Handbags and clutch bags
- Socks and stockings
- Camouflage clothing
Anything deemed “compulsory” for your job or other military event is claimable and everything else is not.
WHAT YOU CANNOT CLAIM
Anything that is not enforced within uniform policy or is not part of a compulsory and distinctive uniform is not claimable, such as regular shoes, hair accessories, t-shirts, underwear, etc.
PROTECTIVE CLOTHING
While the regulations are strict in this area, clothing or footwear that protects both yourself and your uniform from danger are deductible as protective clothing. Weather related items are also claimable, such as sunglasses, hats and sunscreen if you work outside.
WHAT YOU CANT CLAIM
Protective clothing which has been provided by your employer, and which you did not personally purchase are not claimable.
LAUNDRY AND MAINTENANCE
Regardless of who purchased the clothing for your military duties, you are entitled to deductions on the expenses involved in cleaning and maintaining your uniforms. Laundromat, home laundry, dry-cleaning, shoe maintenance, shoe polish and tailoring expenses are all deductible.
WHAT YOU CANNOT CLAIM
You will need to provide evidence of your expenses related to laundering your military uniforms if you receive a uniform maintenance allowance.
MESS FEES AND FUNCTIONS
Compulsory mess subscriptions which relate specifically to work are partially claimable. To get more details on the specific amount claimable, contact your mess committee.
WHAT YOU CANNOT CLAIM
Food, drink and entertainment expenses at can not be claimed, nor can travelling expenses to and from mess functions.
SELF EDUCATION EXPENSES
Studies which are related directly to any current work activities can be claimed, including fees, travel, books and compulsory equipment. However, self-education fees are not deductible if the courses are covered through HECS.
WHAT YOU CANNOT CLAIM
Self-education not related to your immediate work activities or job duties is not claimable.
PHYSICAL TRAINING AND FITNESS EXPENSES
While members of the Australian Defence Force maintain excellent fitness the expenses incurred in keeping a gym membership or special fitness course are considered private, and therefore not claimable.
However, if you are a member of an elite combat squad that requires a special level of fitness above the regular military standard, you may claim fitness expenses. You will have to demonstrate that a special level of fitness is compulsory for your role to make this claim.
WHAT YOU CANNOT CLAIM
Gym memberships, work out equipment, and anything else related to personal fitness is not claimable, with the exception stated in the paragraph above.
PHONE EXPENSES
A deduction on your phone bill may be claimed if you are required to use your phone or send text messages for work. The phone bill will need to be divided and a partial deduction will apply if personal usage occurs on the same phone or phone bill.
If work related calls cannot be identified on your monthly phone records, a reasonable estimate of costs must be created based on four weeks of journaled records.
WHAT YOU CANNOT CLAIM
Phone expenses that are covered by a phone allowance or pre-paid SIM card are not claimable. However you can claim costs that exceed the allowance you receive.
HOME OFFICE EXPENSES
Home office items such as computers, printers and telephones can be deducted if you sometimes work from home. Items with a cost over $300 can not be claimed in full, but instead must be claimed over several years as they depreciate in value.
A percentage of running costs associated with your home office can be claimed depending how often you are there. All running costs could include the electricity required for heating, lighting and cooling, internet charges, and work related phone calls.
WHAT YOU CANNOT CLAIM
Occupancy expenses such as rent, mortgage interest, council rates and house insurance premiums are not deductible in most cases.
COMPUTER EXPENSES
The cost of a computer or laptop which is used for work may be claimed. If you also use the computer or laptop for personal use only a percentage of the cost may be claimed, based on the work to personal use ratio.
Computers and laptops over $300 are not fully claimable in the first year. Instead, you may claim the depreciation of the item (the amount of value the item decreases by every year) over several years. Computers and laptops under $300 can be fully claimed in a single tax year. The maintenance, repair costs and internet access for your computer or laptop is also claimable, but must also be divided by the appropriate ratio if used for work and pleasure.
WHAT YOU CANT CLAIM
Laptops and computers paid for by your employer, or which was reimbursed by your employer is not deductable.
OTHER CLAIMABLE EXPENSES
Depending on your situation as a member of the ADF you are entitled to claim other expenses such as:
EXTRA REGIMENTAL DUTIES (ERD)
Expenses related to ERD’s are deductible if the ERD’s contribute to your income-earning activities. Expenses related to the ERD’s are treated in the same way as other expenses. It is important to remember no expenses can be related to domestic or private activities.
TECHNICAL OR PROFESSIONAL PUBLICATIONS
Journal or magazine subscriptions which include content directly related to your employment as an ADF member are claimable on your tax return.
Union and PROFESSIONAL ASSOCIATION FEES.
Members of a union or professional association can claim membership fees.
TAX AGENT FEES
The cost of repairing your tax return can be claimed, along with any expenses incurred while traveling to get your tax return prepared.
MISCELLANEOUS EXPENSES YOU CAN’T CLAIM
- Haircuts
- Food and meals
- Other social functions
- Fitness and weight loss expenses
- Personal accessories
- Glasses and contact lenses
Often times members of the Australian Defence Force overlook expenses which are related to their work duties. Our experienced tax professionals specialise in maximising deductions for ADF members. Contact a tax agent today to start saving!