The Firefighter's Financial Drill Checklist

Welcome, to the Podcast! Our newsletter made easy! Please note, this podcast features AI-generated voices for your hosts, Mia Taylor and Leo Baker, bringing you expert insights from owner, Ben De Rosa, at Aevum Accounting. Each week, we're here to help you confidently navigate the ins and outs of Australian tax – whether it's for your individual finances, or the complexities of your business. We'll cut through the jargon to give you strategies for compliance, smart planning, and that ultimate peace of mind. So, if you're looking to understand your obligations, maximize your financial position, or simply gain clarity on your money matters, you're in the right place. Let's get started with our review of the week! Thomas Follett said "Ben was fantastic, super thorough and very helpful. Gave great insights and recommendations whilst explaining everything very well." Thank you for the amazing feedback Thomas! We love hearing from our clients and a positive review gets our podcast started on the right foot. And we are back! Leo Baker here, and today in our series on specific professions, we are talking about some of the bravest people in our community, the ones who run towards danger when everyone else is running away: our firefighters. They certainly do an essential and dangerous job, Leo. And when it comes to tax time, their work comes with a very specific set of rules. So today, we're sounding the alarm and running a full financial drill on the tax deductions for professional firefighters. Let's get into it! What's the first order of business? We always start with the foundation, the Three Golden Rules from the ATO that apply to every single claim. First, you must have spent the money yourself and not have been reimbursed. Second, the expense must directly relate to you earning your income. And third, you must have a record, like a receipt, to prove it. Your money, for your job, with proof. Got it. Okay, let’s get moving. What about car expenses? Can a firefighter claim the drive to the station for a call-out? That's a definite no. The ATO is very clear that you cannot claim the cost of normal trips between home and your usual workplace. That applies even if you’re called out late at night or work weekend shifts. Okay, so the daily commute is out. When *can* you claim? You can claim when you're using your own car for work-related travel during your shift. The ATO gives a few clear examples of this. You can claim if you drive: directly between separate jobs on the same day, like from the fire station to a second job as a first aid trainer. You can also claim travel to and from an alternative workplace for the same employer, like driving from your station to a primary school to give a fire safety session. Okay, that makes sense. But what about when you get told to report for duty at a different station for the day? That’s a fantastic question, and it’s one of the most important exceptions. You absolutely CAN claim the cost of travelling from your home directly to an alternative workplace. So, if your usual station is in Joondalup, but you're told to report for a shift at the station in Osborne Park, the trip from your home to Osborne Park and back is deductible. That's a huge one to know! Now, what about that 'bulky equipment' rule? Let's say a firefighter has to take home some massive piece of gear because the storage locker is full. Can they claim that trip? In that specific scenario, yes, but the rules are very strict. All three of the following conditions must be met: First, the equipment must be essential for your job, not just something you take home for convenience. Second, the equipment must be bulky – meaning it’s so large or heavy that it's awkward to transport and you really need a car to move it. And third, there must be no secure storage area available for the equipment at your workplace. Right, so my lunchbox doesn't count as bulky gear. If I do have a claim, how do I calculate it? You have two options. The first is the simple 'cents per kilometre' method, where you can claim cents per kilometre for a maximum of 5,000 work-related kilometres. The second is the 'logbook method'. It's more admin, but if you do a lot of driving between stations or to alternative workplaces, it will almost always result in a much larger deduction. Okay, let's talk about the firefighter uniform. This is a key area for claims. You can claim the cost of buying, repairing, and cleaning your compulsory uniform that you're explicitly required to wear by policy. You can also claim any protective clothing specifically designed to protect you from injury or illness at work. Think steel-capped boots, gloves, and fire-resistant clothing. So, the heavy-duty gear you need for fighting fires, that's a yes. But the casual pair of jeans or sneakers you might wear around the station on a quiet day, that's a no?. That’s exactly right. You can’t claim for conventional, everyday clothing. And don't forget laundry! You can claim up to $150 in laundry expenses without written evidence. As a guide, the ATO suggests claiming $1 per load if it's only work clothes, or 50 cents per load if you mix in your personal items. Good to know! Now, firefighters often get sent to help out in other areas during major emergencies. What happens when they travel? If you travel away from your home overnight in the course of your duties, you can claim your travel expenses. A perfect example is travelling to another state to fight a major bushfire. This can include your meals, accommodation, fares and other incidentals you incur. But a word of warning: receiving a travel allowance from your employer doesn't automatically entitle you to a deduction. You must still be able to prove that you were away overnight and that you actually spent the money yourself. Okay, that covers overnight travel. But what about meals during a regular, long shift? A firefighter's gotta eat! That’s considered a private expense, so you cannot claim the cost of food, drinks, or snacks you consume during your normal working hours. However, there is an important exception, and this directly addresses the meal allowance question. If you are required to work overtime and you receive an overtime meal allowance under your award or agreement, you can claim a deduction for the cost of the meal you buy and eat on that overtime shift. Aha! So the overtime pizza might be claimable. I love it. What are some other common deductions? You can claim the work-related portion of your phone and internet costs, as long as you have records to show your work usage. Union and professional association fees are also deductible. Another great one is any additional cost you incur to renew a special licence you need for your duties, for example, renewing a heavy vehicle permit to drive the fire truck. You can’t claim the cost of getting your initial licence, just the renewal. What about sun protection? Firefighters spend a lot of time outdoors at incidents. Excellent point. Yes, you can claim the cost of sun protection items like sunscreen, sunglasses, and sunhats if the nature of your work requires you to be in the sun. And here's a nerdy accountant fact for you: the ATO will accept a claim for any sunscreen that has an AUST L number on the label, which is different from the SPF number. Okay, now for the fun part. What are some things firefighters might *think* they can claim, but absolutely can't? Fitness is the big one. You generally can't claim gym memberships or fitness expenses. The ATO views a high level of fitness as a general requirement of the job, so you can only claim it if your role requires a level of fitness *well above* the ordinary standard for a firefighter, which is a very high bar to clear. So you have to be 'super-fit' not just 'firefighter-fit'. What else? You can't claim the cost of getting or renewing your standard driver's licence. And another one that comes up is skincare products, like moisturiser. Even though you work in harsh conditions, these are considered private expenses and are not deductible. And finally, a very relevant one: receiving a danger allowance does not automatically mean you can claim a corresponding deduction. That's a trap! Okay, let's talk about getting your taxable income down via salary packaging. Yes, as a Government employee with DFES, firefighters have access to salary packaging, which is administered by Smart salary. This lets you pay for certain things with your pre-tax salary to reduce your taxable income. It’s important to note that DFES employees are generally not eligible for the capped benefits for living expenses or meals that you might see in the health sector. The most common benefit you can package is a novated car lease. And a novated lease is basically bundling up all your car payments and running costs into one easy payment, using some of your pre-tax money to get a tax benefit, right? That’s a perfect summary. But, as always, there's an important consideration. A novated lease is a fringe benefit, and it will appear on your income statement as a "Reportable Fringe Benefit Amount". This amount gets added to your taxable income for calculating your repayment income for government programs, which can have a big impact on your compulsory HELP debt repayments. So it's another one of those things that can be a great benefit, but you have to go in with your eyes open to the flow-on effects. Exactly. The world of tax for firefighters is filled with these specific, nuanced rules. It’s not just about what you can claim, but how you claim it. It's also important to note that this advice is for professional firefighters, not our amazing volunteers, whose tax situation is different. And helping navigate all this is what we do at Aevum Accounting. We take the time to understand your specific role and circumstances to make sure you’re getting every deduction you're entitled to, and to help you understand the full impact of things like salary packaging. It's about having a professional on your team so you can focus on your critical work. A perfect place to end the drill! And that brings us to the end of another episode! We hope today's discussion has provided you with valuable insights and helps you navigate your financial world with greater confidence. Before we go, a quick but important reminder: The information and strategies shared on this podcast are for general informational purposes only and do not constitute specific tax or financial advice. Everyone's situation is unique, and tax laws are complex and constantly evolving. For personalized advice tailored to your specific individual or business needs, we always recommend consulting with a qualified professional. You can connect with our team at Aevum Accounting – visit our website to learn more about our services, including detailed tax guides for various occupations, and an how we can support your financial journey. Thank you so much for tuning in! If you enjoyed this episode, please consider subscribing, leaving us a review, and sharing it with anyone who might benefit. Your support helps us reach more Australians. Until next time, stay savvy, stay proactive, and keep building your financial future! From all of us at Aevum Accounting, goodbye for now!