The Teacher's Tax Toolkit: From Classroom to Cash Back!

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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 stepping into the classroom – well, metaphorically speaking – because this episode is dedicated to Australia's incredible Teachers! You know, Mia, it’s funny because our director, Ben De Rosa, has a lot of teacher friends. And he often says that when he thinks back to his school days, it still feels a bit weird that people his own age are now, you know, in charge of groups of children and educating the youth of today. I guess it’s a sign we’re getting older! It is! But seriously, teachers, we know your job is so much more than just bells and blackboards. You're part educator, part therapist, part referee, and often, part detective when that favourite pen mysteriously disappears! We appreciate the monumental task you undertake every single day. Absolutely. And because you dedicate so much to shaping the future, we want to help ensure your tax returns are as savvy as your lesson plans. So, let’s make sure you're claiming every legitimate deduction. We'll start with the essential foundation: The Three Golden Rules for Claiming Expenses. These rules are like the bedrock of all tax claims, and they apply to everyone, teachers included. Rule number one: You must have spent the money yourself and not been reimbursed. If the school gave you the cash back, it's not a deduction for you. Rule number two: The expense must directly relate to you earning your income. It has to be connected to your teaching duties, not just something you bought for fun. And Rule number three, perhaps the most crucial: You must have a record, like a receipt, to prove the expense. No receipt, no claim. It's the golden rule for a reason! And on that note, let’s talk Record Keeping. Because keeping track of all those receipts can feel like herding cats in a playground! The ATO's myDeductions tool in their app is a fantastic digital assistant for this. You can literally snap photos of your receipts as you get them – like magic! It's so much better than a shoebox, Mia. 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. Making tax time a breeze, not a pop quiz! I Love that!!! Now, let’s get into the specifics of what teachers can claim, starting with Car Expenses. Alright, listen up, because this is where many teachers get caught out. You cannot claim the cost of normal trips between your home and your usual school or workplace. This includes travel for parent-teacher interviews or other work outside normal hours. The ATO considers that a private commute, even if you’re pulling a late one. However, you can claim the cost of using a car you own when you drive: Directly between separate jobs on the same day, like zipping from your teaching job to a second job as a tutor. To and from an alternative workplace for the same employer – for example, driving from your regular school to another school to moderate exams, or for a district meeting. From your home directly to an alternative workplace, like travelling to a venue for a work-related training course. And here's a special rule for teachers: you can claim travel between home and work if you have to carry bulky tools or equipment that are essential for your job, and there is no secure place to store them at work. Think heavy musical instruments, large art supplies, or specialised sports gear that just won't fit in your locker. But remember, it has to be bulky and essential! Your marking isn't bulky enough, unfortunately! Good point, Leo! Next, let’s talk Working from Home Expenses. We know many teachers bring work home, even if it's just planning or marking. If you are required to work or study from home, you can claim a deduction for the additional running expenses you incur. You just need to use one of the ATO's prescribed methods – either the simplified fixed rate method or the more detailed actual cost method – and keep the correct records for whichever method you choose. However, beware the common traps! You cannot claim for things like coffee, tea, milk, and other general household items. Also, no claiming costs related to your children's education – like their iPads or online subscriptions – even if they’re also working from home! And importantly, you can't claim the decline in value of items your employer provides, like a school laptop or phone. It's about your out-of-pocket, work-related expenses. Moving onto a big one for continuous learners like teachers: Self-Education and Study Expenses. You can absolutely claim expenses for self-education, conferences, seminars, and training courses if the study directly relates to your current role as a teacher. It has to either maintain or improve the skills and knowledge you need for your duties, or be likely to result in an increase in your income from your current employment. A great example is a course on working with children with special learning needs – that directly applies to your current role. What you generally can't claim, though, is a course that is only generally related or, crucially, designed purely to get you a new job or enter a new field, like a master's degree in a different discipline. The ATO wants to see a direct link to your current income-earning activities. Alright, let's round up some Other Common Expenses that often pop up for teachers. You can claim the work-related portion of expenses like: Excursions, school trips, and camps – if you incurred costs out of pocket. Teaching aids, like specific classroom resources or educational apps you buy yourself. Your union and professional association fees. Technical or professional publications relevant to your teaching. First aid courses, but only if you are the officially designated first aid officer at your school. And of course, your work-related phone and internet costs, with proper records showing your work-related usage. Last but not least, Clothing and Laundry Expenses. You can claim the cost of buying, hiring, repairing, or cleaning a compulsory uniform that is explicitly required by your school's policy and is distinctive. Think school-branded polo shirts or blazers. What you cannot claim is the cost of conventional clothing, such as regular business attire or sportswear, even if you are required to wear it for work. No claiming those comfortable sneakers, unfortunately! That’s a great summary, Leo. And while you can't claim the sneakers you wear in the classroom, that raises a fantastic question about the gear you need for activities outside the school gates. That's right Mia, I've got a great question that I bet a lot of our teacher listeners have wondered about. We're talking about that classic school tradition: the school camp. Ah, the rite of passage for every teacher and student. Character-building, lots of memories, and probably not a lot of sleep. Exactly! Now, to survive these camps, teachers often have to buy their own gear – we're talking tents, sleeping bags, special camp chairs to sit around the fire and make sure no one is setting anything on fire... Can a teacher actually claim any of that on their tax return? That is a fantastic question, and the short answer is yes, you absolutely can. But—and this is a very important but—it comes down to one key principle: apportionment. Apportionment. That sounds like a fancy accounting word for 'you can't claim all of it'. That's precisely it. The ATO knows that you'll likely use that tent or sleeping bag for your own personal holidays as well as for the Year 7 camp. So, you can only claim the work-related portion of the expense. Okay, so how do you figure that out? If I buy a $400 tent and in the first year, I use it for one five-day school camp and one five-day personal family trip, do I just claim half of the cost? Your logic is spot on. You’d need to work out the percentage of time you used it for work. The best way to do this is to keep a simple diary or log of when you used the equipment. In your example, a 50% work use would be a reasonable claim. There’s one more rule to remember. For any equipment that costs $300 or less, you can claim the work-related portion of the cost as an immediate deduction in that year. But for items over $300, like your $400 tent, you claim the work-related portion of its decline in value, or depreciation, over the item's effective life. So, for the expensive stuff, you claim a little bit each year as it gets older and wears out. The key takeaways are: keep a log to prove your work usage, and be aware of that $300 threshold. You've got it. Good record-keeping is your best friend here. It turns a potential 'maybe' into a definite 'yes' at tax time. Now, let's talk about what you generally Can't Claim, because these are common pitfalls: Gifts you purchased for students – generous, but not deductible. Meeting a student's personal expenses, like paying for their lunch or school books – again, very kind, but not tax-deductible. Flu shots and other vaccinations – generally considered private health expenses. And, as always, any expense that has been paid for or reimbursed by your employer. If you didn't spend your own money, it's not a deduction! Finally, a very important note for our WA teachers: Salary Packaging. As a WA Department of Education employee, you have access to salary packaging, typically administered by Smart salary. This allows you to pay for certain approved expenses with your pre-tax salary, which can reduce your taxable income and increase your take-home pay. It's a powerful tool for boosting your cash flow. Unlike some other sectors, teachers are generally limited to packaging specific items. The most common ones we see are a novated car lease, or other specific benefits like additional superannuation contributions, or portable electronic devices like laptops or tablets, provided they're primarily for work. However, there's an Important Consideration: any packaged benefit creates a "Reportable Fringe Benefit Amount," or RFBA, on your income statement. This RFBA is then added to your taxable income for the purpose of calculating your repayment income for certain government programs. This is particularly important because it can significantly increase your compulsory HELP (HECS) debt repayments, potentially making them kick in sooner or be higher than expected. So, while salary packaging offers immediate tax savings, it can have downstream impacts. Absolutely. We strongly recommend getting in contact with us to find out more about your specific circumstances. We can help you understand the full impact and ensure any salary packaging is structured effectively for you, ensuring it truly works in your best interest. So, to all the dedicated teachers out there, we hope this guide has given you a clear lesson on how to manage your tax deductions and make your income go further. You do so much for our kids, let us help you with your tax! And remember, careful record-keeping and understanding these rules can really add up in your favour come tax time. 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!