Tax time tips for nurses and midwives
Tax time can be a tricky time for nurses and midwives, especially when figuring out what you can and cannot claim as a tax deduction. Here’s a quick guide specifically for you.
What can you claim as a deduction for work-related expenses?
To claim a deduction for expenses:
- you must have spent the money yourself and weren’t reimbursed;
- It must be directly related to the income you’re earning; and
- You must have a record to prove it.
You can only claim the work-related part of expenses. You can’t claim a deduction for any part of the expense that relates to personal use.
Here’s a quick list of common deductible work expenses:
You can claim a deduction for the work-related portion of the following expenses, as long as they relate to your employment:
- Union and professional association fees. This includes your membership fees to the NSW Nurses and Midwives’ Association;
- Annual practicing certificate fees;
- Agency commissions and agency fees;
- Technical or professional publications, including a subscription to The Lamp and the Australian Nursing and Midwifery Journal.
You can claim a deduction for the cost of buying, hiring, mending or cleaning certain uniforms that are unique and distinctive to your job, or protective clothing (e.g. non-slip nursing shoes or support stockings that your employer requires you to wear).
You cannot claim a deduction for the cost of buying or cleaning plain clothing worn at work, even if your employer tells you to wear it, and even if you only wear it for work (e.g. black pants and a white shirt without branding)
Self education expenses
You can claim a deduction for self-education expenses if your course relates directly to your current job (e.g. a wound care course).
You cannot claim a deduction if your study is only related in a general way or is designed to help you get a new job (e.g. the cost of a Bachelor of Nursing if you are currently an enrolled nurse).
Phone and internet expenses
You can claim phone and internet usage if your employer needs you to use your personal devices for work. However, you can only claim the work-related portion of the use of your device.
You can claim a deduction when you:
- drive between separate jobs on the same day (e.g. travelling from your job as a midwife to your second job as a musician);
- Drive to and from an alternative workplace on the same day (e.g. travelling between two different clinics).
You generally cannot claim the costs of trips between home and your place of work, even if you live a long distance from your place of work or you are working outside normal business hours.
However, there are circumstances where you can claim the costs of trips between home and work. The cost of these trips is only deductible if:
- your employer requires you to transport the equipment for work;
- The equipment was essential for earning our income;
- There was no secure area to store the equipment at the work location; and
- The equipment is bulky, being at least 20kg or cumbersome to transport.
If you claim car expenses, you need to keep a logbook to determine the work-related percentage or be able to demonstrate to the ATO a reasonable calculation if you use the cents per kilometre method to claim.
Working from home
For nurses and midwives who have worked from home for any period from 1 March 2020, the Australian Tax Office has made special arrangements to make calculating deductions easier.
There are three ways that you can choose to calculate your additional running expenses for the 1 March – 30 June 2020 period:
- Claim a rate of 80 cents per work hour for all additional running expenses;
- Claim a rate of 52 cents per hour for heating, cooling, lighting, cleaning and the decline of value of office furniture, plus calculate the work-related portion of your phone and internet expenses, computer consumables, stationary and decline in value of a computer, laptop or similar device;
- Clam the actual work-related portion of all your running expenses, which you will need to calculate on a reasonable basis.
This ‘shortcut method’ of calculating work from home expenses is only available for claims up to 30 June 2020.
Claims for working from home expenses prior to 1 March 2020 should be calculated using the existing approaches and are subject to the existing requirements.
You can find the Australian Tax Office’s toolkit here.
This is a general summary only. For more information, go to ato.gov.au/occupations