The Essential Guide to Travel Claims in Individual Tax Return
Paying a large chunk of your income to a third party in the form of tax seriously frustrates everybody. Government provides numerous facilities and services as a return for taking tax from residents. On the other hand, people try to find all kinds of ways in order to pay minimum amount of tax on the income earned during a financial year. For this purpose, people pay financial (tax) advisers to help them reduce tax payment at the end of year. Professionals from this field have plenty of knowledge on how to legally reduce tax payments. An individual might know about these methods but details are difficult to understand for a person having no connection with tax or finance field. Contact the Accountants Sydney for an advice or assistance, that plays a key role when it comes to implementation.
Today, we are going to help you learn about how to save tax money by making travel claims. It does not mean that you are entitled to make a claim for all travel related expenses on your tax return Sydney. The travel claim can only be made on your work related expenses with travelling. We will be uncovering 4 major travel claim types for your better understanding.
- Travel Between Workplaces, also Home and Work
- Car Expenses
- Award Transport Payments
- Other Travel Expenses
Travel Between Workplaces, Also Home and Work
Travelling between two or more work places and work to home or home to work is considered private. However, the ATO allows you to make travelling claims in this case under specific circumstances. If some part of the travelling was for work and remaining portion private then you can only make a claim for the work related travelling. Here is what you are allowed to claim in terms of travelling cost:
- Direct travelling between two or more workplaces for two different employers in case of two jobs
- Travelling to another workplace from usual workplace for the same job’s requirements
- From home to workplace in case you started working at home and went to workplace in order to continue the work of same job
- In case of job’s nature is shifting places which requires working at more than one place every day before going home
- Travelling from home to secondary workplace for job work and then going to the daily workplace or home
- Carrying certain equipment or documents with yourself in case they cannot be left at workplace
This type of claim is entirely different from the one we have mentioned above. Using a hired/rented car, leased car or your own car for work purposes come under the term car expenses. On the other hand, direct costs including fuel can be claimed when using anybody else’s car.
When to claim: Performance of tasks by travelling on car required by the job nature as an employee. In any such case the claim can be made.
Leased or owned cars: Expense incurred for using, rented, hired, owned or leased car for work related travelling can be claimed.
Deduction calculation: Many different methods can be used for calculating work related travelling car expenditure. Difference in total calculated amount can incur by using different methods. Go for the one which produces largest total. In case of jointly owned car, there have to be certain adjustments made to the expenditure.
Car owned jointly: You might not be able to implement the specific rules related for jointly owned cars’ claiming expenses. There are certain conditions which have to be met for every claim method.
Award Transport Payments
Receiving a payment from the employer for travel related expenses incurred is known as award transport payment. It has to be included on tax return because it occurs as assessable income. On the other hand, deduction claim can be made for work travel expenses covered by award transport payments.
Specific number of kilometres or miles is set for every award transport payment in the form of reimbursement of car expenditure. Claim on tax return can be made for the miles which you have travelled extra and were not covered by the payment. Using cents per km or logbook method is required in order to provide evidence for the travelling.
Other Travel Expenses
Expenses for incidentals, accommodation and meals during a task related to job work can only be claimed if you are travelling out of town such as attending meeting or seminar in another city.
Deduction calculation: Only actual expenses can be claimed in case you are allowed to use any vehicle other than car or a borrowed car. On the other hand, amount of claim depends on whether you have received any allowance for costs incurred during work related travelling.
Records of travel expenditure: It is not possible for the tax authorities to accept claims from your side in tax return without being able to cross check with evidence. Specific requirements have to be met related to travel expenses which entirely depends on:
- Travel allowance
- Travel type; overseas or domestic
- Travel length
It is better to consult a professional tax agent Sydney if you often travel due to job’s nature. In this way, you will be able to make better claim on your tax return for work related travelling expenses.