14 Jun 2022

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 information 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 a project manager 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 use in earning 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.  


 

COVID-19
 

Working from home

 

For many of us, working from home has become a permanent 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 if they are items you have bought yourself, so make sure you take a look at the guidance provided by the ATO and of course speak to your registered tax agent.

The 'shortcut' method for claiming work from home deductions is available until 30 June 2022. 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 a COVID-19 outbreak, or the floods, 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.

 

“Getting your tax return right is simple if you have the right records. Make sure you have your records before you lodge your tax return and keep your records after you’ve lodged, in case we have any questions. The easiest way to keep track of your records is with the ATO app.”

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. 

Whether you are an employee or operate as an independent consultant or contractor, it’s a good idea to do your homework.

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.

 

RAT tests

You may also be interested to know that you can claim a deduction for rapid antigen tests (RAT tests) or polymerase chain reaction tests (PCR tests) that you pay for at a private clinic, as long as it’s for a work-related purpose. To claim a deduction for the cost, the test must for the purpose of determining if you can attend or remain at work, and you must have paid for it yourself and kept the receipt.

You can only claim the work-related portion of your expense on COVID-19 tests. For example, if you buy a multipack of COVID-19 tests and use some for private purposes (such as by other family members or for leisure activities), you must only claim for the portion of the expense you use for a work-related purpose.

 

Small businesses

You can claim a tax deduction for most expenses from carrying on your business, as long as they are directly related to earning your assessable income. Just remember the three golden rules for what the ATO accepts as a valid business deduction:

  1. The expense must have been for your business, not for private use.

  2. If the expense is for a mix of business and private use, you can only claim the portion that is used for your business.

  3. You must have records to prove it.


The type of expense determines when you can claim your deduction. Generally, you can claim:

  • operating expenses (such as office stationery and wages) in the year you incur them

  • capital expenses (such as machinery and equipment) over a longer period. However, under the current temporary full expensing rules, you may be eligible to claim an immediate deduction for the business use portion of depreciating assets you acquire for your business.


Find out more about what deductions you can claim, temporary full expensing and record keeping for business.  
 

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.



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