06 May 2021

Tax Return Checklist for Project Managers

Tax
Tax Return Checklist for Project Managers

As a project manager, just like any other company employee or independent contractor, you may be entitled to claim a range of expenses from training and education to tools and equipment. That is, if the expense is directly work related and you haven’t been reimbursed.

During these times when many of us are tightening our belts, it’s worth taking a moment to make sure you are getting all you are entitled to. In this article we've worked with the Australian Taxation Office (ATO) to break down what you may be able to claim this tax season.


Tax return checklist for project managers, including the latest rules from the ATO:

 

1. Education

You can claim a deduction for self-employment and study expenses if it directly relates to your current employment as an office worker and it:

  • maintains or improves the skills and knowledge you need for your current duties - for example, a manager completing a human resources training for managing staff

  • results in or is likely to result in an increase in your income from your current employment.
     

2. Union and professional association fees

You can claim a deduction for union and professional association fees you pay. You can use your income statement as evidence of the amount you pay if it's shown on there.
 

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3. Clothing and laundry

Other deductions will generally depend more on the specific industry you project manage in. You can claim a deduction for the “cost of buying and cleaning occupation-specific clothing, protective clothing and unique, distinctive uniforms”. 
 

4. Car and travel expenses

This is likely to be way down right now. Generally, you can't claim for normal trips between home and work as this is considered private travel. But project managers in the building and construction industry – or other industries where you must travel to places other than your principal workplace – may be able to.
 

5. Tools and equipment

If you buy tools, equipment or other assets to help earn your income, you can claim a deduction for some or all of the cost. If they cost less than $300 you may be able to claim an immediate deduction, if not, you can claim a deduction for the decline in value over time. This includes computers, software and other digital assets or tools.

These have rules around how much you can claim based on their value, their effective life and how much of the asset or tool you use for work versus personal reasons. Take a look at the Australian Taxation Office's (ATO) guidance and/or speak to your registered tax agent.  



tax return checklist for project managers 

COVID-19 and working from home

 

For many of us, working from home has become a new reality. Whether it’s a computer or monitor, desks, office chairs, stationery or other items you need to get the job done, you are generally entitled to claim these expenses either as part of a temporary short cut rate or separately, so make sure you take a look at the guidance provided by the ATO and of course speak to your registered tax agent.

The ATO extended the “shortcut” method for claiming work from home deductions until 30 June 2021 – or the end of this financial year. Using this method, you can claim a “deduction of 80 cents for each hour you work from home as long as you are:

  • working from home to fulfil your employment duties or running your business and not just carrying out minimal tasks such as occasionally checking emails or taking calls; and

  • incurring additional deductible running expenses as a result of working from home."

The shortcut method is an all-inclusive rate and covers all deductible running expenses. If you do use the shortcut method, you need to keep a detailed record of the hours you worked at home using timesheets or diary notes as opposed to other methods where you must itemise and have receipts for each deduction you claim and apportion the claim for work and private use.

Also, if you usually work from home one day a week and due to an emergency situation such as COVID-19, bushfire or drought, you're required to work from home for an extended period, you will need to keep records for the actual hours you’ve worked from home due to the emergency situation as well as your usual working from home arrangements.

 

“Whether you use the temporary shortcut method or any of the other methods to claim working from home expenses, which are still available, you must keep a record to prove your claim. If you use the temporary shortcut rate, that record is the number of hours you worked from home, for example, using a timesheet.”

ATO Assistant Commissioner Tim Loh


In some circumstances, it may make sense to use the other methods to claim work from home deductions, particularly if you are going to be working from home for the foreseeable future. Read the guidelines carefully and/or speak to your registered tax agent. 

The government has initiated a wide range of measures, so, whether you are an employee or operate as an independent consultant or contractor, it’s a good idea to do your homework.

The depreciation measures enacted in response to COVID-19 mean that certain businesses can deduct the business portion of the cost of new, eligible depreciating assets. If you’re a small business, find out more about what’s new and the support available to help you get it right, for example, how to report JobKeeper payments or cash flow boost credits if you received them.

It’s important to take a step back and look at your current position. Jobs, workspaces and government support programs are all changing and will continue to do so for at least this tax year and the next. Seek tax advice as your circumstances change.

 

 

Did you know that AIPM membership is tax deductible for project professionals? Renew or join and you can claim your membership as a tax deduction. 



project manager self assessment quiz