Can I claim a computer on my tax return in Melbourne?
My clients often ring and ask ‘Can I claim a computer on my tax return in Melbourne?’, and the answer to this complicated question, is YES.
You may be surprised to learn that you can claim for computer equipment as well when filing your taxes; this includes printers, scanners, keyboards etc.
Before you buy a new computer or laptop, it is important to consider whether or not the purchase will be tax deductible.
Although these types of purchases represent a significant expense at any time of year, they may become even more costly if done around Christmas time when retailers mark down their prices and try to entice people into buying gifts for friends and family members.
By producing your receipt for the equipment that you have just bought along with the appropriate form, you may be able to offset some or all of your expenditure against your taxable income which could possibly mean a reduction in your tax liability.
This is a great way to save some money if you do not mind buying the equipment now and applying for a potential refund later on.
Keep Your Receipts
The first things you need are receipts, so make sure that you ask the retailers for them because they sometimes forget to offer them over to customers considering their eagerness to sell what they have for sale.
These receipts need to be shown as proof for any expenses such as computers and cell phones because without them, you cannot prove how much you spend on certain things. If the person considering putting through their return does not provide evidence, then it is very unlikely that they will get any money back through this process. This is why it’s important to put forward this claim quickly before any evidence or records are altered or removed by companies or retailers that sold items to consumers at a discounted price.
Only Once Per Item
Another thing about claiming your computer is the fact that you can’t do it several times. If you put through a claim for your computer already, then you cannot put through another claim. The evidence will show that it was done before so you won’t have any luck getting the money back again. Also, this is only good for one year so if you put in a claim now, but realise next year that you need to do it again, well it won’t be possible because the records will show that you’ve already made the claim.
To qualify for this process of claiming computers and other items on tax returns, certain criteria must be met firstly by the person wanting to make the claim. If they don’t meet all of these requirements then there is no point in continuing with their efforts because they probably will not succeed. Firstly, consumers must purchase their computer or item that falls into the category of ‘special equipment’. Then, they must either purchase this product brand new or it must be bought as a pre-owned product.
Do Your Research
Also, make sure you check out all the other deductions and exemptions before you proceed with any claims because there might be something else that you can claim for instead which may benefit your overall situation much more than making a claim on computers. For instance, if you’re self-employed then perhaps looking into claiming work related clothing would save you more money than purchasing a computer to do your work on. Make sure to do your research before proceeding with any claims.
Conditions to Claim
If you’re certain that you want to make a claim for a computer then the next step is to be prepared for all of the requirements that will need to be met in order to qualify as a deduction for this major purchase. Firstly, it must have been bought after July 1st so anything older than this won’t count and secondly, it must have cost more than $300 for one for it to even have a chance of being claimed as a deduction. It doesn’t matter if you bought a pre-owned or new computer as long as it meets these two criteria then there might just be some good news waiting from you from the ATO.
If you are indeed lucky enough to have met these two conditions then you’ll be pleased to know that the next requirement is fairly easy to meet as well, although it can vary slightly depending upon where you live. If your computer costs more than $300 then this means that it will also be valued at $150 or more and for this reason, there must also be a separate warranty contract which still has at least 12 months remaining on it. If not, then any claim made could be rejected by the ATO because of this simple fact and so it’s highly recommended by experts to always purchase an extended warranty when buying new electronics such as computers in order to ensure the option of making a tax deductible claim later on. This can be especially beneficial if you have to replace your computer for this reason.
You Can Claim For Software
There are also many types of software that are 100% allowable to claim against tax return – Microsoft Office being one of them.
However it’s worth mentioning that while some can be claimed against others cannot; just because Adobe Photoshop might be allowable to claim against it doesn’t mean that Adobe Illustrator is.
Tax deductible software can be claimed if it relates directly to your business or an expenditure within your business. For example, tax deductible software could include Microsoft Office which you used in order to send invoices, manage clients lists and keep track of accounts. Many people believe they can claim their old computer on their taxes when in most cases this is not the case – most new computers are bought with this type of software preinstalled however older versions may not be.
If some of your software comes with educational discounts it’s important to keep hold of purchase receipts so that these can be claimed back at a later date when filing your taxes , whether or not they are tax deductible
It is perfectly legal for businesses to claim for their work expenses through self-assessment tax forms however there are stringent criteria which must be met in order to do so. In addition, there would have been a substantial amount of incurred during the running and maintenace of the business that may also be covered by this allowance, including computer repairs in Melbourne.
Ask Your Accountant
It is best that you carefully follow your individual state guides when it comes to making tax claims on computers or any other electronics purchases for this matter. However, the general rule of thumb is that if the item is new and costs more than $300 then there are usually no problems with claiming it up to the value of $150. While some people may think this doesn’t amount to much money, many Australians will use their claim wisely because they don’t want their claim rejected unexpectedly which also means that they might only be approved for an amount between these two points. So while it’s not a lot to claim each year, it can still add up over time.
When it comes to claiming the expenses you’ve worked so hard for, no matter what they may be, always consult a professional accountant without ever having to pay them a penny for their advice and guidance. They’ll be able to help you fill out all of the necessary forms and tell you exactly what receipts and invoices you need before you get started.
Visit ATO for more details.