Can I claim a handbag for tax deduction?

Workers have the right to claim the cost of a purse, briefcase or satchel as a tax deduction – but there is a catch.

The bag should only be used to carry items that you need for work, such as a laptop, work documents or diaries.

If you also put your lunch, wallet, keys or phone there, you can’t claim anything.

According to Australian Tax Office rules, your personal effects must be placed in a second bag, which you cannot claim.

“You cannot claim a deduction if you are using the bag primarily for personal purposes, such as carrying your lunch and your beauty and hygiene products,” the ATO said.

“This is for private use. “

Personal items should be kept separate from work items if you wish to claim the cost of your purse. Credit: Constantin johnny/Getty Images

If you take the bag to social events as well as work, you can still claim a portion of $ 300.

But you have to remember to keep your personal items separate when using them for work.

“The amount of the deduction will depend on how much you use the bag for business purposes,” the ATO said.

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If you use it 50 percent of the time for work and 50 percent of the time for social activities, you can claim 50 percent of the cost of the bag.

ATO gave two examples to clarify some of the confusion.

In the first example, a deduction is allowed.

Do not put your wallet in your bag if you want to claim the bag as a tax deduction.
Do not put your wallet in your bag if you want to claim the bag as a tax deduction. Credit: moon ho joe/Getty Images / iStockphoto

“Elizabeth is buying a purse for $ 150 to carry her tablet and her work diary,” said the ATO.

“The handbag is only used for carrying work items and she carries another bag for her personal items.

“She doesn’t use the handbag that carries her tablet outside of working hours.

“Since the bag is used for the production of taxable income, Elizabeth can claim a deduction. “

In the second example, a tax deduction would be denied.

“Arki buys a messenger bag for $ 220 to carry his lunch and snacks, a personal medical kit and private toiletries, as well as a mini-tablet, which he uses in his lucrative business,” said the ‘ATO.

“He also wears the satchel outside of working hours, so the satchel is not primarily used for taxable income generating purposes.

“Arki is unable to claim a deduction for the satchel.”

If the bag costs less than $ 300, you can claim the full amount if you use it 100% of the time for business purposes.

If it costs more than $ 300, you’ll need to use the ATO’s amortization calculators to find out how much you can claim.

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