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Are items purchased prior to starting work tax deductable?

Newbie

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Replies 1

Hi,

 

To give some background information. I am a healthcare worker who has purchased surgical loupes while still a student. Now, 2 years later I have graduated and am working full time. The surgical loupes are being used solely for work. How would I go about claiming the loupes as an expense as they are now used solely for work? Let's say the loupes are around $4000. Surgical loupes have a lifespan according to the ATO of around 10 years. I am a contractor. 

 

Thank you!

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ATO Certified Response

Former Community Support

Replies 0

Hi @phoom

 

From our website page, Decline in value of depreciating assets – individuals

The start time of a depreciating asset is when you first use it, or install it to use for any purpose, including a private purpose. Assets decline in value from their start time, but you can only claim a deduction for the decline in value when you start using it to earn employment income. If you first buy an asset for private use, then later use it to earn employment income, you need to work out the decline in value from the start time.

 

You can estimate your own effective life of the asset if you don't agree with the commissioner's determined life of 10 years, but for this example I'll assume you'll use it. This means that if you acquired the loupes two years ago for $4000, and have only just started using it for income generating purposes, you can claim a $400 deduction per year for 8 years.

 

Hope that helps.

1 REPLY 1

Most helpful response

ATO Certified Response

Former Community Support

Replies 0

Hi @phoom

 

From our website page, Decline in value of depreciating assets – individuals

The start time of a depreciating asset is when you first use it, or install it to use for any purpose, including a private purpose. Assets decline in value from their start time, but you can only claim a deduction for the decline in value when you start using it to earn employment income. If you first buy an asset for private use, then later use it to earn employment income, you need to work out the decline in value from the start time.

 

You can estimate your own effective life of the asset if you don't agree with the commissioner's determined life of 10 years, but for this example I'll assume you'll use it. This means that if you acquired the loupes two years ago for $4000, and have only just started using it for income generating purposes, you can claim a $400 deduction per year for 8 years.

 

Hope that helps.