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scau27(Initiate)Initiate
3 July 2022

I only had a small taxable income for FY21-22, but I did have expenses relating to setting myself up for employment that started in June 22. The expenses included items like Laptop, Phone, and Office Equipment as the job is a remote position. The claimable expenses will far exceed the tax I paid so I understand I won't get a rebate on my FY21-22 tax return.


The questions I have are:

  • Can I claim these deductions against next year's taxable income?
  • If so, do I still submit details of the deductions in the FY21-22 tax return? Or submit them in the FY22-23 return?

I have seen an answer already provided to a similar question which says (https://community.ato.gov.au/s/question/a0J9s0000001K1YEAU/p00053274):


You must claim deductions in the year you incur the expense.

While work-related deductions can reduce your taxable income, they won't create a loss you can defer to later years.


However, I am confused as it appears to say something different on the ATO website - https://www.ato.gov.au/Individuals/myTax/2021/In-detail/Tax-losses-of-earlier-income-years/


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3,802 views
2 replies

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RachATO(Community Support)Community Support
4 July 2022

Hi @scau27,


Can I just confirm were these expenses incurred while preparing yourself to gain new employment or in the course of performing your role in a position you were already working in? Or did you start up your own business (such as a sole trader)?


Deductions can be claimed for expenses directly relating to running a business or performing current employment activities, but not for expense that put you in a position to initially obtain work. These pre-engagement expenses are considered private in nature, and aren't claimable for tax purposes.


When it comes to allowable work or business tax deductions, you typically claim them in the same financial year you've incurred the expense. However, some items (such as the laptop and phone) are claimed as depreciating assets if they cost more than $300 individually. This means you spread the deduction for their expense over several years, depending on their determined effective life. If that's the case, you'd claim a portion within the financial year the cost was initially incurred, and each subsequent year until the end of it's effective life.


The rules for carrying forward tax losses depends if you're claiming as an individual (non-business related) or as a sole trader, partnership or company (business related activities). If it's not business related, but for performing your work as an employee, unfortunately these losses can't be carried forward and offset against future earnings. They need to be offset at the first opportunity, and this would be at the time you lodge a tax return.

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Most helpful reply

RachATO(Community Support)Community Support
4 July 2022

Hi @scau27,


Can I just confirm were these expenses incurred while preparing yourself to gain new employment or in the course of performing your role in a position you were already working in? Or did you start up your own business (such as a sole trader)?


Deductions can be claimed for expenses directly relating to running a business or performing current employment activities, but not for expense that put you in a position to initially obtain work. These pre-engagement expenses are considered private in nature, and aren't claimable for tax purposes.


When it comes to allowable work or business tax deductions, you typically claim them in the same financial year you've incurred the expense. However, some items (such as the laptop and phone) are claimed as depreciating assets if they cost more than $300 individually. This means you spread the deduction for their expense over several years, depending on their determined effective life. If that's the case, you'd claim a portion within the financial year the cost was initially incurred, and each subsequent year until the end of it's effective life.


The rules for carrying forward tax losses depends if you're claiming as an individual (non-business related) or as a sole trader, partnership or company (business related activities). If it's not business related, but for performing your work as an employee, unfortunately these losses can't be carried forward and offset against future earnings. They need to be offset at the first opportunity, and this would be at the time you lodge a tax return.

Liked by Bejay and scau27
scau27(Initiate)Initiate
5 July 2022

Thanks for your answer. The expenses did relate to a position I had already started, albeit a part-time position at this stage. As most of the items are depreciating assets > $300, based on the information you have provided I will be able to claim the applicable depreciation in next year's return.


I think you have answered my question.

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