There are a number of common tax deductions available for sale professionals. It is important that you are aware of what you are eligible to claim so that you can get the most out of your tax return.  

Whether you are a real-estate agent, car sales person or sales rep, working in sales can be a demanding job. There is always another contract to close or client to follow up. With so many demands for your time, it is not surprising that many sales professionals are unsure what they can and can’t claim on their tax return each year. 

Here is a list of possible tax deductions for sales professionals to help you with getting the most out of your tax deductions. 

Work-related car and travel expenses  

If you ever have to travel as part of your sales job? Whether it’s meeting clients or travelling between offices, travel expenses are one of the most commonly claimed deductions for sales professionals. On top of this, you can include public and commercial transport or the cost of using your own vehicle for work-related travel. 

It is important to keep in mind, there are a few exclusions to observe and processes you will need to follow to claim these expenses. Usually, you can’t include trips from work from home (or vice-versa). 

 If you use your own vehicle, there are two methods available you can follow in order to claim your car expenses: 

  1. If you drive more than 5,000km during the year the logbook method will likely put the most money in your pocket at tax time. Simply record all work-related AND private trips in a logbook over a 12-week period. This allows you to calculate you work related use of the car and claim a percentage of all your car expenses for the year. 
  2. Or, if you only drive sporadically (less than 5,000km) you can use the cents per km method of $0.72 per kilometre travelled without needing a logbook. 

 Other work-related travel tax deductions for sale professionals might also include

Bus fares, taxi fares, train fares, hire care expenses, plane flights, bridge and road tolls or private care use.

If a real estate agent has to drive from their house to multiple sites on a daily basis to conduct inspections for potential buyers and tenants. The real estate agent could use their private car to make these trips and would be required to record all of their business and personal travel in a log book for 12 weeks.

At the end of the 12-week period, they would calculate how much of their travel is work related. If 80% of their travel is work related that means that they would be eligible to claim 80% out of all pocket expenses (rego, insurance, fuel, interest, maintenance etc.) as a work-related expense which would boost their tax return.

Home office expenses

You can also claim a percentage of costs such as internet and land-line if you have to work from home. To ease the burden on Australian taxpayers who are working from home the Australian government has extended the 80 cents per hour shortcut deduction method. This incentive originally introduced in April 2020 will now be in place until 30th June 2021.  

Under this arrangement, taxpayers are allowed to claim a rate of 80 cents per hour for all their running expenses, as opposed to having to calculate costs for specific running expenses. The original requirement of having a dedicated work-from-home area is also removed. Under this scheme multiple people in a household are allowed to claim the 80 cents per hour rate.  

Tax agents or self-lodgers must include the “Covid-hourly rate” in their annual tax returns if they choose to nominate to use this method. If choosing to use this shortcut method, all an individual has to do is keep a record of the hours they have worked from home as evidence when making a claim.  

To be eligible to claim a deduction whilst working from home the ATO outlines that; “you must have spent the money, the expenses must be directly related to earning your income and you must have a record to prove it”.  

These additional expenses include more money spent on lighting, heating, clean and cooling. Working from home also means that more money is spent on electricity used to operate electronic items. Phone bills increase, internet expenses surge and there is also a decline in the value of furniture and computers that are used for employment purposes.  

Mobile Phone Expenses

If you ever make or receive calls for work on your personal mobile phone, it might be a call to your boss about a job you’re working on or ordering supplies for your work site. These calls can be claimed as a work-related percentage of your phone use on your tax return. This is a very common but an often-overlooked tax deduction for apprentices and trainees.

To work out your work-related percentage, go through a typical monthly phone bill and work out how many calls are work related vs personal. If 50 out of 100 calls are work-related, that’s 50%.

This means you will be able to claim 50% of your monthly phone bill on your tax return.

Work-Related Tools and Equipment

If you have had to purchase tools or equipment, like a tablet or a laptop bag for your job or bought a licence for some type of software you might be able to include them on your tax return.

Tax-deductible work-related tools and equipment for sales professionals include:

  • Purchase or leasing costs of laptops and tablets
  • Computer accessories such as USBs, cables and headphones
  • Stationery, including diaries and notebooks
  • Software and stock license fees
  • Work-related personal phone expenses
  • Protective items
  • Repair costs for work-related tools and equipment
  • Insurance premiums for work equipment

In order to claim a tax deduction on an item there has to be a clear connection between the item and the individuals work related or income producing activities. 

Self-education deductions for sales professionals

As a sales professional, chances are you have some specialised skills that help you build relationships with your clients. However, did you know that you can claim the cost of keeping your sales skills up to date each year?

Whether it be attending networking conferences or facilitated learning, professional development is essential to stay ahead in your career. You can claim self-education and development expenses if you undertake job-related training or are required to attend networking events.

Common self-education deductions sales professionals can make include:

  • The fees for short courses or university courses related to your work
  • Phone calls
  • Internet
  • Travel costs
  • Accommodation and meals (if your course you to stay overnight)
  • Tools and equipment required to undertake the course
  • Books and training manuals

If you plan to claim self-education expenses on your tax return, the training must be directly related to your current job.

For example, if you are a real estate agent you could claim the cost of a real estate seminar you attended, but a fashion design course you did in your spare time would not be allowed.

Other common tax deductions for sales professionals

  • Union and professional association fees
  • Subscriptions to job related journals and magazines
  • Income protection premiums paid outside of Super
  • Charity donations
  • Tax agent fees for preparing your prior year’s tax return

The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 07 36086800. 

The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 1300 1 VAULT (1300 182 858)

Post Author: Craig Dangar

Leave a Reply