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Laundry Tax Deduction

October 14th, 2013

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Laundry Tax Deduction

Of all the tax deductions claimed in Australian tax returns, laundry would have to be the most common.  In fact you wouldn’t be Aussie if you haven’t made this claim at least once!

Following are the two main methods for claiming laundry as a tax deduction:

Method 1:

It is common for people who work full time and have a uniform or wear protective clothing at work, to claim a tax deduction of $150 for washing their clothes.

In order to make this claim the tax office states the following:

Where a taxpayer does not keep written evidence of their laundry expenses, the Commissioner will allow:

  • A claim of $1 per load (which covers washing, drying and ironing) in situations where only work related clothing is being laundered, and
  •  50 cents per load where both private and work related clothing is being laundered at the same time.

The above is hereafter referred to as the ‘Commissioner’s estimate’.  If the Commissioner’s estimate is used, a taxpayer should keep details of the number of washes that were done during the year, and what type of clothes (work related, private or both) were included in each wash.

Therefore, I suggest, before you run off and claim the full $150, you keep a diary to make sure you have actually done enough loads of washing to warrant the maximum $150 claim.  If you don’t, you may just find yourself in trouble when the tax office comes knocking.

Method 2:

The second method of claiming laundry is one that few people know about.  This method will give you a great result if you’re planning on buying a new washing machine, and the amount of times you wash your work clothes in a week is rather high.  It’s a little harder to understand than your basic $150 method above.  However, if you take the time to keep your receipts and crunch your numbers, your tax refund will look so much healthier.

Under this method you keep receipts and calculate the actual cost of each load of washing rather than using the commissioners estimate.  You may then be able to claim the following expenses:

–          A percentage of depreciation on your washing machine

–          A percentage of depreciation on your dryer

–          Washing Powder

–          Fabric Softner

–          Your Iron

–          Electricity for the running of your appliances

–          Water for your washing machine

 

You can read up on both methods here at Taxation Ruling 98/5.  For those of you that lodge your own tax via Etax I suggest you get to know this ruling really well.  That way you can sleep at night knowing that if the Tax Office come knocking your records are in order.

 

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