tax deductions for sales representatives

Tax Tip – Sales and marketing managers are on the 2013 Tax Office audit target list

In 2013 the Tax Office will be reviewing (or auditing) tax returns lodged by sales and marketing managers to ensure the deductions claimed are correct.

To make sure your return is correct, check our list below for the deductions you are allowed to claim. Also make sure you have the correct records for each of your claims. If you need advice, contact us at info@personaltaxspecialists.com.au.

If you work as a sales representative, sales or marketing manager, some of the tax deductions you may be able to claim on your personal tax return are:

Meals and Travel

  • The cost of buying meals when you work overtime, provided you have been paid an allowance by your employer (you can claim for your meals without having to keep any receipts, provided you can show how you have calculated the amount you spent)
  • The cost of meals and incidental expenses when you are required to stay away overnight (if you receive an allowance from your employer, you can claim the full amount of that allowance provided it is shown on your PAYG payment summary). If you didn’t receive an allowance, you should keep receipts to prove the amount you have spent on all meals and accommodation
  • The cost of parking, tolls, taxis and public transport if you are required to travel to attend seminars, meetings and training courses as well as to visit customers or prospective customers (if you need to stay away overnight you can also claim for the cost of all meals and your accommodation)
  • The cost of using your own car for work, including travel to visit customers or prospective customers, to pick up stock or other supplies for the business, attend meetings or training courses (to claim for car costs it is usually best to keep a diary record of the number of kilometres you travel during the year for work purposes and then we can calculate the amount of your tax deduction at the end of the year)

Work Clothing

  • The cost of buying compulsory uniforms (including shirts, pants, skirts, jackets, jumpers – your uniform should have the business’s logo on it to ensure it is tax deductible)
  • The cost of laundry or dry cleaning of your uniforms
  • The cost of buying any protective equipment required for working at your or your customers’ business premises, including gloves, goggles, masks, steel-capped boots, gum boots, sun protection items, winter outdoor jackets and aprons. This is only relevant if the protective items are required to be worn by your employer, due to potential dangers in your work environment (eg if you visit manufacturing plants or building sites)

Training

  • The cost of work-related short training courses, for example first aid, OH&S, bookkeeping, sales techniques, customer service, merchandising, computer skills or management, which are not run by a University or TAFE (you can also claim for the cost of travelling to and from the course and any accommodation and meal expenses if you are required to stay away overnight)
  • The cost of self-education courses run by a University (not including HECS/HELP fees) or TAFE (for example Cert IV in Business Sales or Cert IV in Horticulture if you work in a the nursery industry). If you are studying you can also claim for the cost of books, stationery, equipment and travel required for your course

Work Tools & Expenses

  • The cost of buying and repairing equipment you use at work, including tools, electronic organisers, laptop computers and mobile phones
  • The cost of any materials or supplies that you buy for use at work, for example stationery, diary, work bag or briefcase

Other Work Expenses

  • The cost of annual association membership fees or union fees
  • The cost of work-related magazines, journals or books (these could include sales, customer service, computer, management or OH&S books or books relating to the type of products that you sell)
  • The cost of work-related mobile or home telephone calls and rental (you should keep a diary record of the number of phone calls you make for work for one month and then we can use that to estimate your usage for the whole year)
  • The cost of work-related internet connection fees (you can only claim the proportion of your monthly fees that relate to work use, which could include emailing or research relating to your job)
  • The cost of maintaining a home office if you are required to complete work at home (you should keep a diary to record how many hours per week you spend working from your home office)

General Expenses

There are some tax deductions that all employees can claim on their personal tax returns:

  • The amount of any donations to registered charities (as long as you haven’t received anything in return for your donation, such as raffle tickets or novelty items)
  • The cost of bank fees charged on any investment accounts
  • The cost of income protection or sickness and accident insurance premiums (this type of insurance covers you if you hurt yourself (including when you are not at work) or become sick and you are unable to work. It will pay you your normal wage until you are fit to return to work – if you don’t have this insurance you should see a financial adviser or ask us and we will refer you to someone who can organise it for you. It is definitely worthwhile)
  • Your tax agent fees (the amount you pay to your accountant to prepare your tax return each year)
  • The cost of travelling to see your tax agent (you can claim the cost of travelling to see your accountant to have your tax return prepared. You should keep a record of the number of kilometres you travel and any other incidental costs such as parking, meals, accommodation etc)

We suggest that you keep receipts for all purchases that are work related, even if they are not listed above. That way, when we prepare your tax return, we can decide whether you are allowed to claim a tax deduction for them or not.

If you would like any more information about the deductions listed or if you would like the Personal Tax Specialists team to prepare your tax return for you to ensure you maximise your claims this year, contact us at info@personaltaxspecialists.com.au.