The Paramedic's Tax Playbook: Maximise Your Returns

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! Craig Tredinnick says "Ben provided an excellent accounting service. He was extremely thorough and had specific knowledge around expense claims regarding my occupation. I would highly recommend his accounting services to others." Thank you for the amazing feedback Craig! We love hearing from our clients and a positive review gets our podcast started on the right foot. Over to you Leo. Hello everyone, and welcome back! I’m Leo Baker. And I'm Mia Taylor. Today, we're dedicating an entire episode to a group of incredible frontline heroes: Paramedics! We simply cannot express enough how grateful we are for the demanding, vital, and often harrowing work you do for our communities. Absolutely, Mia. You’re often the first responders in critical moments, and your professionalism and care are truly invaluable. At Aevum Accounting, we have a very special connection with the paramedic community. In fact, our director, Ben De Rosa, would often tell us, somewhat proudly, that he completes the tax returns for nearly all paramedics in Perth! It’s true, Leo, and it’s something we’ve actually built up over the last six years, accumulating a significant number of paramedics across Australia as clients. And speaking of Ben and paramedics, we have a classic Aevum Accounting story to share with you all. This is a good one! Picture this: Ben, our esteemed director, was out enjoying himself one night at a popular bar in Perth. As the night progressed, he, let's say, misjudged a step and took a bit of a tumble. Nothing serious, thankfully, but enough to warrant some attention. And who should arrive on the scene to pick him up and look after him but a team of dedicated paramedics! Now, at the time, they weren't clients. But even with a slight concussion, our director, in true Ben De Rosa fashion, was apparently very concerned when he kept telling them that they should come to see him to do their tax returns. The paramedics, bless them, were initially just focused on his well-being, but he was insistent, proudly stating he already completes a lot of paramedic tax returns across Australia! We're told they were very concerned but also very amused. So, yes, we are incredibly grateful for the work paramedics do, not just for their professional care but also for the memorable stories they inadvertently create for us! It’s a story that truly encapsulates our connection to the profession. And because we deeply appreciate your work, we want to help you make the most of your tax return. So, let’s start with the foundation: The Three Golden Rules for Claiming Expenses. These are non-negotiable, whether you’re a paramedic or running a business. To claim a deduction for any work-related expense, it must meet these three conditions: First, you must have spent the money yourself and not been reimbursed. If your employer paid you back, you can't claim it. Second, the expense must directly relate to you earning your income. It needs to have a clear connection to your work as a paramedic. And third, and this is crucial, you must have a record, like a receipt, to prove the expense. No record, no claim – it's that simple. Speaking of records, here's a super important note on Record Keeping. The ATO's myDeductions tool in their app is a fantastic way to keep track of your receipts and expenses throughout the year. You can literally snap photos of them on the go! And for those working with us at Aevum Accounting, while we don't have direct access to your personal myDeductions app, you can easily export your records from the app and email them to us, or bring them to your appointment. A shared Google Drive, OneDrive, or Dropbox folder is also a fantastic way to store your records throughout the year for easy access, whether you're managing it yourself or sharing with your accountant. It truly transforms that end-of-year scramble into a simple export. Now, let's dive into some of the most common and often misunderstood claimable work-related expenses, starting with Car Expenses. This is where many paramedics trip up. You generally cannot claim the cost of normal trips between your home and your usual workplace. That’s considered private travel, no matter how early or late your shift is. However, you can claim the cost of using a car you own for work when you drive: Directly from your job as a paramedic to a separate second job on the same day. To and from an alternative workplace for the same employer – for example, from your usual station to head office for a meeting, or to a training facility. From your home directly to an alternative workplace, such as a different station for the day. Or, crucially, from your home depot to a station you have been temporarily assigned to, provided it is genuinely a temporary workplace. For claiming car expenses, you have two main methods. The Cents per Kilometre Method is often the most straightforward for many paramedics. You can claim a set rate for each business kilometre, up to a maximum of 5,000 km per car per year. This rate covers all your running costs – fuel, insurance, servicing – so you cannot claim those costs separately. It’s simple, quick, and ideal if your work-related driving is under that 5,000 km limit. Then there's the Logbook Method. This allows you to claim the business-use percentage of all your actual car running costs, including petrol, insurance, servicing, and even depreciation. But, you absolutely must keep a logbook for a continuous 12-week period to determine your work-related percentage, and that percentage is then applied to your costs for five years. This method can yield a higher deduction if you do a lot of work-related travel. And a very important note: if you have a leased or salary-packaged car, you generally cannot claim these car expenses, as those costs are already effectively claimed through your employer via the packaging arrangement. Next up: Working or Studying from Home. Especially relevant with how modern roles are evolving. If you are required to work or study from home, you can claim a deduction for the additional running expenses you incur. We’ve seen many paramedics doing administrative work or professional development from home. You have two primary calculation methods: The Fixed Rate Method is the simpler option. You claim a set rate for every hour you work from home. This rate covers costs like electricity, gas, internet, and phone usage. You can also make separate claims for the decline in value of work-related equipment, like computers, printers, or office furniture. Keep a diary of your hours! Then there's the Actual Cost Method, which involves claiming the actual work-related portion of all your home office expenses. This method requires much more detailed records and calculations, including a dedicated work area. It can potentially offer higher deductions, but the record-keeping burden is much greater. Alright, let’s talk about something very tangible for paramedics: Clothing and Laundry Expenses. You can claim the cost to buy, hire, repair, or clean – including laundry costs – clothing if it meets specific criteria. It must be either protective clothing designed to shield you from specific risks of illness or injury at work, like specialized safety wear. Or, it can be a compulsory uniform that you are explicitly required to wear by a strictly enforced policy, and which is distinctive to your organisation. This means it has a logo or specific design that clearly identifies you as a paramedic from a particular service. However, you cannot claim for conventional clothing, such as plain shirts or sneakers, even if your employer requires you to wear them as part of a dress code. It's about 'distinctive' or 'protective'. Finally, let's cover a few other common, but important, expenses that paramedics often overlook. You may be able to claim the work-related portion of your annual ahpra registration and other professional association or union fees. These are directly related to your ability to work. And here's a popular one: the cost of a meal you buy and eat when you work overtime, provided you receive an overtime meal allowance under an industrial law or award and you include that allowance in your income. If you don't get an allowance, or don't include it, you can't claim the meal. You can also claim tools and equipment used for work, such as a stethoscope, shears or a pin watch. If an item costs more than $300, it needs to be claimed over several years as a decline in value. And of course, Personal Protective Equipment (PPE) that you buy, such as gloves or face masks, is fully claimable. Don't forget your work-related phone and internet costs – you must have records to show your work-related usage. And finally, for those working outdoors for long periods, sunscreen, sunhats, and sunglasses are claimable. Before we wrap up, a critical note for many health-sector employees, including paramedics: Salary Packaging. This is a fantastic benefit you likely have access to through providers like Maxxia. It allows you to pay for certain expenses with your pre-tax salary, which can significantly reduce your taxable income and increase your take-home pay. It's a huge perk that can save you real money. Commonly packaged items we often see and recommend exploring include Living Expenses, up to a capped amount, currently around $9,010 for expenses like mortgage repayments, rent, or even utility bills and groceries. There's also an additional capped amount, currently around $2,650, for Meal and Entertainment, which can be used for dining out at restaurants, pubs, and cafes. However, and this is a big "important consideration": while salary packaging is a fantastic benefit, it's crucial to structure it correctly. Packaging creates a "Reportable Fringe Benefit Amount," or RFBA, on your income statement. This RFBA is then added to your taxable income to calculate your repayment income for various government programs, which can have significant implications for things like your compulsory Help & Hecs debt repayments or family tax benefits. Exactly. It’s a powerful tool, but one that needs careful management to ensure it's working for you, not against you. We strongly recommend getting in touch to find out more about your specific circumstances. We can help you understand the full impact and ensure your salary package is optimized for your overall financial position. So, to all our incredible paramedics out there, we hope this guide has shone a light on how to maximize your tax returns and claim what you're genuinely entitled to. Understanding these areas is key to achieving that financial peace of mind. And remember, the team at Aevum Accounting is here to support you every step of the way, just like those paramedics supported our director, Ben, even when he wouldn't stop talking about tax! 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 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