Tax deductions for employee graphic designers
1. Travels and Meals
- The cost of purchasing meals while working overtime, provided that your employer has paid you an allowance. You may claim for your meals without keeping receipts as long as you can demonstrate how you arrived at the amount you spent.
- The cost of meals and other costs incurred when staying overnight for a business event. If your employer provides you with an allowance, you may claim the full amount of that allowance as long as it appears on your PAYG payment summary. Keep receipts to show the amount you spent on all meals and lodging if you didn’t receive an allowance.
- If you must travel to attend seminars, meetings, or training courses, you can claim the cost of parking, tolls, taxis, and public transportation. If you must stay the night, you can also claim the cost of all meals and your lodging.
- You can claim the cost of driving your own vehicle for work-related purposes, such as going to clients’ locations, attending meetings, taking training courses, and gathering supplies for your company. It’s usually best to keep a diary or logbook to track your annual mileage for business-related travel in order to claim your car expenses. The amount of your tax deduction at the end of the year can then be determined.
2. Work attire
- The cost of purchasing required uniforms, such as shirts, slacks, skirts, coats, and jumpers; your uniform should bear the company’s emblem to qualify as a tax deduction). Despite what your company may have instructed you to wear, conventional attire is not deductible.
- The cost of laundry, dry-cleaning and repair of your uniform.
- The cost of purchasing sun protection gear, such as sunglasses, hats, and sunscreen, if your job requires you to spend at least some of your time outside.
- The cost of short training programs for the workplace that are not offered by universities or TAFEs, such as instruction in new software applications, OH&S, and management skills.
- You can also claim travel expenses to and from the program as well as any overnight lodging and meal costs if necessary.
- The cost of self-education courses run by a University (not including HECS/HELP fees) or TAFE. You can also claim the cost of books, stationery, equipment and travel needed for your course.
4. Other expenses
- The cost of purchasing and maintaining tools you use for business, such as laptop computers, mobile phones, electronic organizers, and graphic design software.
- The cost of any supplies or materials you purchase for use at work, such as work bags, briefcases, USB sticks, stationery, and memory cards.
- Subscriptions, books, phone bills, and internet expenses.
- The cost of yearly dues for association membership.
- The cost of books, magazines, or journals used for work-related reading. This could include books or materials bought for a project’s study.
- The price of the percentage of your pay TV rental that you use for work-related research.
- The cost of mobile or home phone rentals and calls made for work. You should keep a diary of how many calls you make for work each day for one month so that we can estimate how often you use your phone throughout the year.
- The cost of internet access costs for work purposes. You can only deduct the percentage of your monthly fees that are related to work use, which could include emailing or doing research for work or school.
- The expense of keeping a home office if you have to work from home. You should keep a diary to track how many hours you work from home each week.
5. General expenses for employed graphic designers
All employees, not just graphic designers, are eligible to claim the following tax deductions on their individual tax returns:
- Amount of any donations made to registered charities
- Any bank costs associated with investing accounts.
- The cost of income protection or illness and accident insurance premiums.
- Your tax agent fees.
- Travel expenses to see your tax advisor. You can deduct travel expenses to meet your accountant to have your tax return prepared. Keep track of the distance you go, as well as any additional expenses, such as parking, food, lodging, etc.
Tax tips for self-employed graphic designers
If you are a self-employed graphic designer, you may check the provisions related to freelancers or self-employed individuals. Here are some tax tips to get you started.
1. Keep track of your taxes
You must set aside money for taxes because you are directly responsible for your tax debts if you work for yourself. The amount you save will depend on how much money you make from your freelance work. You’ll be charged the same individual income rates as everyone else because the Australian Taxation Office recognizes this revenue as personal income.
2. Maintain a log of your costs
You can deduct any money you spend on items or services that are directly connected to operating your graphic design firm from your taxes. You can deduct a portion of your rent or mortgage, as well as your heating, cooling, and internet costs, for instance, if you work from home. You can also deduct costs for domain registration, website hosting, and subscriptions to products like InDesign and Photoshop. However, you’ll need to keep a thorough record of the spending and a receipt to file a valid claim.
3. Keep in mind superannuation
It’s crucial to keep in mind that once you start working as a freelance graphic designer, a portion of your salary won’t go directly into your superannuation. Although it is not required by law, the ATO permits you to claim any funds you add to your super in the tax return you file the following year. Additionally, low- to middle-income individuals may be qualified for a government co-contribution of up to $500.
4. Consult a tax accountant
Self-employed individuals may easily get lost when it comes to accounting and taxes. To avoid problems and potentially expensive fines, it is critical that you understand your tax requirements. The best way to achieve this understanding is by working with a tax accountant. Tax accountants are professionals who help you not only understand the complicated tax requirements for your line of work but also help you maximise the tax refund you may receive.