Are All Work-related Expenses Deductible?

One of the most common questions we come across at tax time is - what expenses are deductible?

There’s a natural assumption in tax: if something relates to your job, you should be able to claim it.

A recent tribunal case shows why that isn’t always the case. In the tribunal, a pilot attempted to claim medical expenses required to regain certification to work. On the face of it, it seems logical as the expense is directly tied to employment. But the claim was denied.

The key issue was timing.

The expense wasn’t incurred while earning income, instead it was incurred to make earning that income possible. It’s a subtle distinction but one that comes up more often than you might expect.

What can I claim?

As a general guide, you usually can’t claim expenses that put you in a position to earn income, such as:

• Initial training or certifications

• Medical clearances required before starting work

• Costs associated with getting a job

Even though they feel connected to your income, they fall outside what the ATO considers deductible.

If you’re unsure, it’s worth checking with an accountant and business advisor before lodging your return. These are the kinds of details that can lead to adjustments later if misunderstood.