Make 1 July less taxing by following the Boy Scout motto; Be prepared!

The beginning of the year is the perfect time for educators working in early childhood education and care (ECEC) to align their finances so they’re ready come tax time. To get some expert advice and support, The Sector Assistant Editor Freya Lucas reached out to a finance industry professional to share their best tax tips.

Mark Chapman, Tax Communications Director with H&R Block, says that the key point to remember as the new year starts, is to get into the habit of recording all work-related expenses, and keeping copies of all the documentation you’ll need at tax time, such as invoices, receipts, bank and credit card statements.

“Even if you’re not sure if its claimable, keep the paperwork and you can discuss it with you tax agent at tax time. Better still, if you need guidance on what you can and cant claim, have a chat with your tax agent now so you understand the parameters of what is and isn’t claimable,” Mr Chapman said.

When it comes to what can and cannot be claimed as a tax deduction, Mr Chapman’s advises that not all educators can claim the same deductions – those who work on a casual basis, or who work across multiple centres might have access to additional deductions for travel claims between workplaces, for instance – so it’s worth getting advice specific to your situation.

Educator-specific deductions

Speaking about what specific deductions can be made, Mr Chapman said one of the things he loved most about working in the finance industry was discovering all the deductions educators can claim.  

Mr Chapman highlights some “smart deductions” for educators to be aware of:

• Annual teacher registration (if applicable)

• Reference books or a professional library

• Stationary, art materials, stopwatches and computer consumables including pens and toner cartridges, if used in the course of your work day

• Depreciation on technology costing more than $300, like computers, laptops, tablets, mobile phones and printers (items less than $300 may be written off immediately)

• Teacher aids

• Professional development such as conferences and courses linked to your teaching

• Home study expenses including electricity, internet and phone (if your study relates to your career)

• Work-related travel (not including the commute to and from work)

• Clothing (such as uniforms or specialised sun protections) and laundry.

The education advantage

The importance of having access to expert advice, to ensure the most accurate deductions are applied for, and making the most of your return, was highlighted by Mr Chapman, who said “Our advice is the same whether you’re a first-year educator, or have been in the job for awhile. It’s important to employ detailed knowledge of the tax system so you know what you can and can’t claim at tax time.”

Although the general rule, “if you’re not reimbursed for out-of-pocket expenses related to work, you can claim it” applies, Mr Chapman said it was vitally important to do the groundwork before tax time and keep a record of your outgoings.  

“Retain your receipts and invoices, bank and credit card statements so you can go through them with a tax expert. To take your tax to the next level, keep a journal of the number of kilometres you travelled for work this year, when and where you went and why it’s work-related,” he said.

The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any product.  

The views reflected in the commentary are subject to change at any time without notice.

Individuals should not use this article to make financial decisions and are highly recommended to seek professional advice from someone who is authorised to provide financial advice.