If you’re wondering whether a police check is tax-deductible in Australia, it’s important to understand that not all expenses related to a police check can qualify for a tax deduction. The deductibility of a police check depends on specific criteria, and some expenses are considered personal and cannot be claimed as a deduction.
One key factor to determine whether a police check is tax-deductible is whether the check was applied for while you were receiving an income based on that check. If you are applying for a police check as a prerequisite for a job, unfortunately, the expense cannot be tax deductible. The reason behind this is that the expense of a Police/Record Check is considered “too soon” to be considered for a deduction since the individual does not have an income at that point.
However, if you are applying for a police check as a current employee or while still receiving income for a specific role, you may be eligible for a tax deduction. The crucial consideration here is that the expense should be made while you are earning an income.
There are three essential criteria for claiming a tax deduction on a police check expense:
- Non-refunded expense: The cost of the police check must not be refunded by your employer. If your employer does not sponsor or cover the cost of the police check, it may qualify for a tax deduction. However, it’s important to note that not all expenses related to the police check application are tax-deductible. For instance, the cost of obtaining other private ID documents related to the background check is not tax-deductible.
- Related to current employment: The deduction must be directly related to your earning income. If the police check is required for your current employment or to continue earning income in a specific role, it may be eligible for a tax deduction.
- Documentation and proof: To claim a tax deduction, you need to keep records and receipts as proof of the expense. Valid tax invoices from the supplier of the goods or services are essential. These records should include information about the purchase, details of the supplier, cost of the material, and the date of purchase.
It’s important to note that the tax deduction for a police check expense does not cover the cost of obtaining identification documents or any other prerequisites for the check. Expenses related to personal identification documents are considered personal and do not qualify for a tax deduction. For example, if a schoolteacher needs to renew their ID documents to apply for an updated police check, only the police check expense itself may be tax-deductible, provided the teacher still earns an income from teaching.
If you have difficulties filing or applying for a tax deduction, it’s advisable to seek assistance from professional tax agents who can help you navigate the process. It’s also crucial to have a clear understanding of which expenses are eligible for a tax deduction and not assume that all expenses automatically qualify. Generally, work-related expenses are more likely to be eligible for a tax deduction.
In conclusion, the tax deductibility of a police check in Australia depends on various factors, including the timing of the check, the nature of the expense, and the relationship to current employment or income. It’s important to consult with qualified tax professional or refer to the guidelines provided by the Australian Taxation Office (ATO) to ensure compliance with tax regulations and maximize eligible deductions.
This article is for general information only. It does not make recommendations nor does it provide advice to address your personal circumstances. To make an informed decision, always contact a registered tax professional.