Tax deductible hand bags

Adam Cursio

Director

THERE’S never been a better time to hit the shops. Despite reports to the contrary, it seems women may be able to claim handbags on tax.
But there’s a catch — you have to keep a logbook to prove it carried more than lipstick and lunch to the office.

Accountants and financial advisors are trying to clarify tax rules for women, following reports that suggested that the Australian Tax Office (ATO) makes it easier for men to claim deductions for briefcases than it does handbags.

I find it hard to see how the two situations are different for a man and woman. The only difference I see is that one bag is called a ‘handbag’ and the other a ‘satchel/briefcase’.

Assistant Tax Commissioner Graham Whyte has opened the door for a greater number of claims to be made on handbags by clarifying that a person “can claim a deduction for assets that are predominantly used for work purposes, such as bags and satchels used to carry work papers or electronic devices, to the extent that such items are used for work purposes.”

It may be prudent to keep a record of the work use of a handbag, ideally by using a logbook for a period of about three months, in the event that the ATO decides to audit a person’s tax affairs.

Fundamentally if you are carrying work items to and from work, be that a laptop, work papers and minor personal items, then you are in a position to claim a reasonable deduction for the cost of a handbag or manbag.

Handbags that are large, such as tote bags, and those with lots of compartments are seen to be more suitable for carrying work items compared to a smaller clutch-type handbag.

If you are interested in a tax deductible bag check out this wonderful collection from one of our valued clients Ivy Ivy bags www.ivyivybags.com.au made especially for busy mums and the savvy businesswomen.

The only sad news is that makeup is not commonly allowed as a tax deduction — unless you’re performing on stage or screen.

Any financial advice provided is general in nature. It does not consider your needs, financial situation or objectives. You should consider the appropriateness of this advice to your circumstances before you act on it.