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June 22, 2018

Tax deductible handbags

Small Business, Tax Deductions, Women in Business

Do you have your eye on a handbag and need an excuse to justify the purchase?

For as long as I can remember it has long been accepted that brief cases are tax deductible when used for work purposes. In more recent times the ATO has acknowledged that handbags can also be tax deductible when used for work purposes such as carrying documents, client files, laptops, tablets and smartphones.

There are a few catches:

  1.  Substantiation -The ATO is fussy about substantiating claims, it is necessary to keep a diary, log book or other record of use to prove the use between personal and work. You are also more likely to meet the criteria if you can take a photo of a smaller handbag you keep your lipstick and other personal items in and another photo of a larger tote with space for your work items.
  2. Cost – The cost of the bag is not relevant but the ATO is more likely to review larger claims so make sure you have your substantiation in place.
  3. $300 limit – You can obtain an immediate deduction for a handbag costing up to $300. A handbag over $300 will be depreciated over its expected useful life.
  4. Purported use – Make sure the handbag is fit for work use. An evening bag or small bag to tuck under your arm just won’t cut the mustard.

 

Happy shopping!

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