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Handbags for Work May Be Tax Deductable

Women will have more reason to shop for a new handbag now that the Australian Tax Office (ATO) confirms that handbags may be claimed on tax, with the provision that the bag is used for work.

Following news reports that it is easier for men than women to claim tax deductions for briefcases than handbags, ATO Assistant Tax Commissioner, Graham Whyte said in an interview with that tax deductions could be claimed with items primarily used for work. “You can claim a deduction for assets that are predominantly used for work purposes, such as bags and satchels used to carry work papers or electronic devices, to the extent that such items are used for work,” says Whyte. He furthered explained this in a statement, “it is the use of the item rather than its description that is relevant. For example, if a briefcase is primarily used to carry lunch and other personal items to work it is being used in a similar way to a handbag and no deduction for its cost would be available.”

Although ATO has opened the door for more work assets you can claim for deduction, tax experts advise keeping a record of the use of these items, such as a handbag. The size of the handbag as well as may also be looked into by ATO when reviewing the tax claim. Large tote bags that can carry electronic gadgets such as a laptop or tablet are most likely considered than clutch-type handbags.

Designer bags that cost thousands of dollars might also be challenged by ATO when you claim the item for tax deduction. “Most work expenses don’t demand an expensive purchase to carry out the work-related function such as carrying items, so the ATO may view most of the cost is of a private nature,” said Paul Brassil of PwC.

Sunglasses, hats, and even sunscreen lotion can also be tax deductible if these items are clearly linked to your job. For example, a person who spends most of his time outside can claim these items as tax deductibles.

Click here to see the ATO’s complete list of work-related deductions you can claim.

If you would like to know more about what can and cannot be deducted please contact us.

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