Ladies, handbags can be tax deductible

Ladies, handbags can be tax deductible

15 June 2016

The Australian Tax Office (ATO) has confirmed that handbags used for work are tax deductible in certain situations.

Reports suggested the ATO makes it easier for men to claim deductions for briefcases than it does for women to claim for handbags.

In an interview for Assistant Tax Commissioner Graham Whyte confirmed that the door is open for a greater number of claims to be made on handbags.

"You 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," he said. 

In a statement, he said that while handbags have the “hallmarks” of private expenditure, it is the use of the item rather than its description that is relevant. For example, if a briefcase is primarily used to carry lunch and other personal items to work it is being used in a similar way to a handbag and no deduction for its cost would be available.

The ATO’s rules are simple; if a handbag is bought mainly (more than 50 per cent) or wholly for work, is used to carry work-related items and is an essential part of a person’s ability to earn an income, then a claim can be made. 

But there’s a catch — you have to keep a logbook to prove it carried more than lipstick and lunch to the office. The ATO loves documentation and in order to support your claim it would be preferable to keep a log book for at least a month to prove usage.

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.

As if we didn’t need an excuse to buy that handbag we have been eyeing off…

View More