Claim your Handbag, Backpack or Briefcase as a tax deduction

As it gets closer to June 30, it’s worth keeping in mind that you can claim your handbag, backpack or briefcase as a tax deduction in Australia. You just need to demonstrate that it was directly connected with producing your income.

What does that mean? There are no solid rules about what is or isn’t allowed, but rather “common sense” based guidelines:

If it’s a bag used predominantly to transport the tools you use for work then you should be able to claim it ie. if you work in construction and are carrying a torch and hammer to work daily, or if you work in an office and your tools are your laptop and stationery. As long as you can reasonably demonstrate that you are using the bag to produce income you should be able to claim it.

Conversely, a small clutch that holds a phone, some cards and keys is probably not going to hold up to scrutiny. Those items are not strictly work related and are more private in nature so the bag that transports them is unlikely to be an allowable deduction.

Ensure that you keep a receipt of the purchase. If the bag costs less than $300 you can claim the whole amount in this year’s tax return. If it cost more than $300, you’ll need to depreciate it over its useful life.

Given the amount of hours we spend lugging a bag to work (and between clients!), it’s nice to know that the purchase of a beautifully made, long lasting bag can be used to reduce your taxes 🙂