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Tax Deductions for Firefighters

February 1st, 2014

In to the fire, a Firefighter searches for possible survivors

 

Tax Deductions For Firefighters

This is my longest ever blog on Online Tax Solutions.  But let’s face it, our Australian fire fighters are true hero’s and definitely worthy of sharing my knowledge on tax deductions for firefighters.

VOLUNTEER FIREFIGHTERS

When a volunteer firefighter donates their time to fighting fires and receives no monetary payment in return then they will not be entitled to any tax deductions. Tax deductions for firefighters must be related to the earning of assessable income.  Unfortunately because volunteer fire fighters do not earn any assessable income, they are therefore unable to claim any tax deductions.

ATO ID 2002/910 looks at a volunteer firefighter who wanted to claim the purchase of fire equipment as a tax deduction.  The answer from the ATO was no.  This is what they said:

The expenditure will not be incurred in the course of gaining or producing the taxpayer’s assessable income. Consequently, the taxpayer will not be entitled to a deduction under section 8-1 of the ITAA 1997 for the costs of firefighting equipment which they will use as a volunteer firefighter.

It is also important to note that the expenses a volunteer firefighter incurs in undertaking voluntary work does not meet the criterion of a donation of money or property.  Therefore they can’t be claimed as a tax deduction under donations.

Taxation Ruling TR 2005/13 deals with gifts and at paragraph 83 it states:

Services that are provided to a Deductible Gift Recipients by volunteers are not tax deductible as there is no transfer of property involved. Likewise any expenses that may be borne by the volunteer in the course of providing the services to the DGR are not deductible as gifts as there is no transfer of property to the DGR.

PAID FIRE FIGHTERS

Generally paid fire fighters can claim the following expenses as a tax deduction:

  • Protective Clothing and Uniform
  • Washing protective clothing and laundry
  • Sunscreen, hats and sunglasses
  • Fire equipment, torches and batteries
  • Mobile phone for being on call

Motor Vehicle Travel

For the paid fire fighter, motor vehicle travel is a grey area and a very misunderstood area of tax law.  Firstly, fire fighters are often contacted at home to come immediately into the fire station.  This has resulted in fire fighters believing they are entitled to motor vehicle travel from the minute they leave their house to travel to the station.  On top of that, they are often required to carry bags of fire equipment which can be wrongly interpreted for heavy and bulky equipment.

Let’s quickly look at a few common motor vehicle travel scenario’s encountered by fire fighters and how the Tax Office might view these circumstances in the case of an audit:

Travel between home and the fire station

Generally, expenditure in travelling between one’s private residence and place of work is of a private nature and is accordingly excluded as a deduction under section 8-1 of the ITAA 1997. Only in some special circumstances is such travel deductible. These exceptions are summarised in Taxation Ruling IT 2543 and include where the taxpayer’s employment can be construed as having commenced before or at the time of leaving home.

Taxation Ruling IT 112 states:

In the case of a taxpayer whose employment requires him to be on stand-by duty at home, the deductibility of expenditure in travelling from home to a place of work is a question of fact to be decided according to the circumstances of each case. The mere fact that a person is on stand-by duty at home is not enough. The fact that the person gets paid for the time taken to travel to work after receiving an afterhour’s call out, although relevant, is insufficient. More important is whether the person commences his or her actual duties from the time of the call.

In the case of a fire fighter, their duties do not normally commence from the time a call out is received at home.  When they arrive at the fire station is normally when their duties commence.   This type of travel is therefore commonly classed as home to work travel and generally no tax deduction will be allowed.

 Travel between home and the fire station carrying bulky equipment

A deduction may be allowable for the cost of travel between home and work for an employee who is required to transport bulky equipment.

Paragraphs 63 and 64 of Taxation Ruling TR 95/34 explain that a deduction may be allowed in these circumstances where:

  • The cost can be attributed to the transportation of bulky equipment rather than to private travel between home and work,
  • It is essential to transport the equipment to and from work and it is not done as a matter of convenience or personal choice,
  • There are no secure facilities available for storage of the equipment at the work place.

The question of what constitutes ‘bulky equipment’ must be considered according to the individual circumstances in each case.

In Crestani v. FC of T 98 ATC 2219; (1998) 40 ATR 1037 (Crestani’s Case), a toolbox which measured 57 cm x 28 cm x 25 cm and weighing 27kg was considered as ‘bulky’, in the sense of ‘cumbersome’, and the transport cost was ‘attributable’ to the transportation of such bulky equipment rather than private travel between home and work. The employer did not provide a secure storage area for the toolbox and the use of public transport was not a viable option.

Unfortunately Tax Agents and the Tax Office have little to work with when it comes to assessing if they think equipment may be heavy or bulky.  All we can really do is refer to case law such as Crestani’s case and make an assessment based on each firefighters individual circumstances.  Certainly if you’re a firefighter doing your own tax online through etax and wish to self-assess your eligibility for travel with bulky and heavy equipment, then comparing your situation to that of Crestani’s would be a good start.  Your equipment should at a minimum be over 20 kg and I would recommend closer to 27kg.  I also recommend that you submit a private binding ruling to the ATO so you can get a yes or no answer.  That way you won’t be stung should you be flagged for an audit.

Travel between fire station and emergency site(s)

Travel expenses you incur in travelling from the fire station to an emergency site may be a deductible expense.

WHAT IS NOT TAX DEDUCTIBLE?

GYM MEMBERSHIPS AND GYM EQUIPMENT

Taxation Rulings TR 95/13 and TR 95/17 deal with the deductibility of gymnasium membership fees for police officers and Australian Defence Force (ADF) members. Generally, such fees are considered to be private in nature and not deductible under section 8-1 of the ITAA 1997.

However, a deduction is allowable for these costs if the police officers or ADF members can demonstrate that strenuous physical activity is an essential and regular element of their specific occupation income earning activities as physical training instructors or members of special combat squads or of special emergency squads and they are required to maintain a level of fitness WELL ABOVE the average Defence Force member.

There is no doubt that firefighters require a certain level of fitness and strength.  However, generally the Tax Office does not consider this level of fitness comparable to that of a police force physical training instructor or a defence force member in the special combat squad.  Therefore, generally gym memberships will not be tax deductible.

SHAVERS & HAIRCUTS

Unfortunately the list of tax deductions for firefighters does not include shavers and haircuts.

The Commissioner has issued two occupational rulings providing his views on the deductibility of expenditure on hairdressing and personal grooming.

Taxation Ruling TR 95/13 deals with the Police Force and Taxation Ruling TR 95/17 deals with the Defence Force. Both rulings state that a deduction is not allowable as such expenditure is private in nature.

Regardless of the fact that you may be required to be clean shaven in order to wear your breathing equipment apparatus, you will generally not be allowed a tax deduction for razors.  Likewise, if you’re required to maintain your hair in a certain way, you will generally not be allowed a tax deduction for this either.

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