If you’re a farm hand or labourer on an agricultural property, don’t leave any of your tax deductible expenses behind. This would be like leaving a tip for the ATO every year!
Don’t leave money on the table with the ATO. Read on through this blog to ensure you claim all the tax deductions you can. Don’t miss out on getting the refund you are due.
If you save every little bit, and deduct everything you’re entitled to, the tax return can be massive. In this article, we will discuss everything you need to know as a farm hand in order to claim all of your eligible tax deductions and maximise your tax refund.
What qualifies as a tax deduction?
There are only three main requirements that qualify as an expense for tax deductions, which is calculated against your income:
- You must have spent the money and not have been reimbursed
- It must be related to your job
- You must have a record to prove it
Remember, a record isn’t necessarily a receipt. There are tax deductions you can claim without a receipt. Continue on to find out more.
What constitutes an expense as “related” to your job you might ask? Here’s a definition of your taxable income, and a list of farmer tax deductions.
What makes an expense related to your work?
For an expense to be directly related to your job, it has to be directly related to your ability to generate income. The best way for us to explain this is with an example:
If you are working on a farm, the purchase of protective boots that are essential to wear will be an expense directly relating to your income because it would be impossible to do the job without it (safely!).
However, if you work in a pub and like to wear a fancy shirt and cologne, the purchase of the fancy shirt and cologne will not be an expense directly relating to your income, because you can still do your job without looking and smelling great!
See the difference?
If you’re unsure, One Click Life’s easy-to-use platform will help you qualify your deductions – along with some help from our qualified tax team.
What is your taxable income
Your taxable income is money generated from your employer or your work. Your taxable income also includes:
- PAYG summaries
- Pensions and government allowances
- Interest earned (banks etc)
- Dividends
- Rental property income
- Business income
- Other income earned (capital gains etc)
Tax deductible expenses for farmers
Farmer specific
- Buying protective clothing, or uniforms with the logo (if required to wear them)
- The cost to laundry the above clothing
- Protective clothing from the sun. Hats, sunglasses, suncream if you work outdoors.
- Purchase of equipment and tools (if required) up to $300
- Depreciation expense of equipment and tools over $300
- The repair and/or upkeep of tools and equipment (if required)
- Home office expenses (if needed to work from home)
- Interest generated from loans relating to work activities
- Self-education and courses if they are related to your work
- Licences and certificates relating to your farming work or operating farming machinery
- Fees from joining a union/other similar organisations
- Subscriptions and magazines relating to your work
- Travel expenses if work related (conferences etc)
- Driving between two places of work in your own vehicle. This is usually best claimed using the cents per km method of claiming a tax deduction.
Protective clothing
As a farmer or labourer, you’ve no doubt had to buy a fair share of protective farm clothes and farming jackets. From hard hats, to reinforced boots, to sunglasses, to sunscreen, you can claim all of these as a tax deduction.
If you need a hand, make sure you get the help from someone that knows what they’re doing.
Purchase of tools and equipment
The purchase of tools and equipment for your farming work, if they are less than $300, can be claimed as a straight tax deduction. If the purchase was more than $300, such as for farming vehicles, then you’ll have to claim the depreciation expense of the item.
Repair of tools and equipment
When your tools and equipment break and you need to fix them, you can claim this cost as a tax deduction. This may help you decide whether you need to buy new equipment or have it repaired, so keep it in mind.
Travel expenses
Farming properties certainly aren’t small, and it’s no secret that Australian farmers have to travel significant distances for work. If you are travelling because it is necessary for work, you can claim the expense as a tax deduction.
Get the help of a professional to calculate your travel expenses.
General
- Car expenses and general wear if your car use is work related (estimated Km or a logbook with all expense items)
- Travel expenses for your work (flights, taxis and trains etc)
- Accommodation needed for work reasons (including meals)
- Work phone bills
- Work related computing
- Work from home costs
- Self-education
- Tax return fees dating to the year previous
- Insurances
- Rental expense (if you are renting)
- Charity donations and gifts
- Sun protection (if you have to work outside)
Maximising your tax return with an online tax agent
There will be more tax tips and deductions for Australian farmers that aren’t on this list. Tax deductions are not only industry specific, but also change from individual to individual.
If you’re still wondering what can shearers claim on tax or what can you claim as a primary producer, the best way to claim the most you can (which will maximise your money) is with One Click Life.
The more you deduct, the less tax you pay and the more money you can spend on yourself. Clearly, you will want to deduct the most you can, and the sure-fire way to do that is with OCL’s easy-to-use platform.
If you can claim OCL’s fees back on tax as a deduction too, why wouldn’t you use our platform to minimise your tax payable?
One Click Life offers online tax returns at your fingertips in an easy-to-use platform run by some of the best heads in the industry. Your tax return can be done in just 60 seconds and is overseen by one of our pros!
How easy and stress-free is that?
Taxes, health insurance, and wills can be time-consuming and tedious. Our app allows you to be able to do this fuss-free, giving you a simple way to organise, track and manage all of your life admin in one place.
Let One Click Life take care of your tax return, and life’s essential tasks so you can spend more time doing the things you love.