The tax period can be truly stressful at times, particularly for sales and marketing personnel who must juggle client meetings with campaign deadlines and travel schedules.
Most of them do not know that there are many deductions they can claim to lower their taxable income.
In fact, with proper knowledge and preparation, you could receive a higher tax return while still complying with the Australian Taxation Office (ATO) guidelines.
In this blog, we aim to simplify all that and help you understand what you should claim, what you should consider and how to keep your records.
Understanding tax deductions for sales and marketing professionals
Tax deductions are the most important financial management component for sales and marketing professionals. The Australian Taxation Office (ATO) allows individuals to share expenses incurred in producing income; this would satisfy certain conditions.
Key eligibility criteria for tax deductions
Two basic eligibility criteria apply to tax deductions:
- The expenses are linked directly to the income-generating activities.
- Available documentary evidence to warrant the claim.
Below is a breakdown of common claimable and non-claimable deductions:
| Category | CAN Claim | CAN’T Claim |
|---|---|---|
| Vehicle Expenses | Travel to client meetings or sales calls | Commutes from home to a regular workplace |
| Travel Expenses | Work-related overnight travel costs | Relocation or personal travel expenses |
| Clothing and Laundry | Uniforms with a company logo | General business attire or casual clothes |
| Training and Development | Courses or workshops relevant to your role | Education unrelated to your current job |
| Client Gifts | Modest gifts for business purposes | Entertainment costs, such as dinners or events |
| Home Office Expenses | Running costs for a dedicated home office | Costs for shared spaces like living rooms |
| Marketing and Advertising | Business cards, promotional materials | Personal advertising expenses |
| Professional Memberships | Fees for job-related organisations | Initial certification for a new career |
| Phone and Internet | Work-related portion of your bills | Personal phone or internet use | Office Supplies and Equipment | Tools, software, and stationery for work | Equipment provided by your employer |
Vehicle and travel expenses
If your job requires frequent travel, understanding what you can and cannot claim is crucial.
Claimable vehicle expenses:
- Costs for work-related travel, such as attending meetings or site visits.
- Use the Cents Per Kilometre Method (up to 5,000 km) or the Logbook Method to calculate deductions.
Claimable travel expenses:
- Work-related flights, accommodation, meals, and incidentals for overnight stays.
Exclusions:
- Commutes between home and your regular office.
- Costs for personal holidays or non-work-related trips.
Home office expenses
With remote work becoming more common, sales and marketing professionals can claim deductions for home office expenses if they work from a dedicated space.
What you can claim:
- A portion of electricity, internet, and heating or cooling costs.
- Depreciation of office equipment like desks, chairs, and computers.
What you can’t claim:
- Expenses for non-dedicated spaces, such as using a dining table for work.
Training and professional development
Improving your skills can offer significant tax benefits, but only if the education is relevant to your current job.
Claimable expenses:
- Fees for training courses, conferences, or seminars that enhance skills needed for your current role.
- Associated travel and accommodation costs.
Exclusions:
- Courses designed to help you switch careers.
- General education programs unrelated to your job.
Client gifts and entertainment
Building relationships with clients is essential in sales and marketing, and some costs are deductible.
Claimable gifts:
- Modest items like branded merchandise, hampers, or small tokens of appreciation.
What you can’t claim
- Entertainment expenses, such as taking clients to dinner or events.
Marketing and advertising
Promoting your services or products can be a legitimate deduction.
Claimable expenses:
- Costs for creating and distributing business cards, flyers, or online advertisements.
Exclusions:
- Personal advertising unrelated to your current employment.
Keeping records
Good record-keeping is critical for substantiating your claims and avoiding ATO penalties.
What to Keep:
- Receipts and invoices showing:
- Supplier name
- Date of payment
- Nature of goods or services
- Amount paid
Digital Records:
- You can store digital copies of receipts, provided they are legible.
Tip: Use tools like the ATO’s myDeductions app to track expenses throughout the year.
Tax tips for sales and marketing professionals
To maximise your refund and ensure compliance:
- Stay Organised: Keep track of all receipts and invoices throughout the year.
- Document Work Use: For mixed-use items like phones or the internet, keep a log to calculate the work-related percentage.
- Review Your Claims: Ensure all deductions meet ATO requirements to avoid penalties.
- Seek Professional Advice: If unsure about your deductions, consult a registered tax accountant for expert assistance.
Ready to simplify your tax return?
Don’t leave money on the table this tax season. At KPG Taxation, we specialise in helping sales and marketing professionals claim all eligible deductions and maximise their refunds. Our experts ensure your tax return is accurate, compliant, and tailored to your profession. Save time, avoid errors, and get the most out of your tax return with our trusted team.
