Need Your Advice: Tax Deductions for 2 Jobs

catcancode on 13/01/2021 - 00:29

Hello all,

I would like to check how tax deduction works on this situation.

  • I have 2 jobs 1 & 2.
  • I make 30K from job 1 and 10K from job 2.
  • I spend 1K on buying equipment for doing job 2.
  • I spend no personal money on job 1.

My total income of 40K is taxable, but my job 2 income is less than taxable threshold.
Can I still use 1K equipment as tax deduction on the 40K income?
I guess the answer could be no as 1K equipment is used for producing 10K of job 2 only and has nothing to do with job 1.

Thank you for your answers!

Financial Tax Deduction

Comments

  • Pam74 on 13/01/2021 - 00:30
    +8

    Accountant

  • danny1213 on 13/01/2021 - 02:34
    +6

    If you use the tools for both work and private purposes you can only claim for the work-related part. For example, if you have a computer that you use for private purposes for half of the time you can only deduct 50% of the cost.

    The type of deduction you can claim depends on the cost of the asset:

    • for items that aren't part of a set and cost $300 or less, or form part of a set that together cost $300 or less, you can claim an immediate deduction for their cost
    • for items that cost more than $300, or that form part of a set that together cost more than $300, you can claim a deduction for their decline in value.

    https://www.ato.gov.au/individuals/income-and-deductions/ded…

    In saying so if I have a 100K job with no equipment and a 10K job where I need to buy a PC - I can claim the PC component. They look at the tax you pay as a whole, not particularly for each job.

    • catcancode on 13/01/2021 - 02:44
      +1

      Thank you! This 'They look at the tax you pay as a whole, not particularly for each job.' really makes sense.
      Another common example is the bank interest tax which is included in the total taxable amount. The job equipment has nothing to do with this bank interest income, but the deduction can still be applied on the total taxable amount.

  • Quantumcat on 13/01/2021 - 08:48
    +1

    You don't get tax-free threshold on both jobs. If you claim tax-free threshold on job 1 you don't get it for job 2 and you are taxed on the whole lot. You will pay the same tax as someone else on a single job of $40k.

  • SgtBatten on 13/01/2021 - 09:17
    +1

    The answer is yes.

    Tax deductions reduce your taxable income, it doesn't matter how much you make at an individual job, the point is you had work related expenses and can reduce that income from 10 to 9k which reduces your overall taxable income.

  • Seraphin7 on 13/01/2021 - 09:29
    +1

    In short, yes. This is on the assumption that the income and expenses you refer to are in your name and therefore are relevant to your personal tax return, not that of separate business entities.

    Your total income is $40k, less $1k in deductions. You'll be assessed tax on $39k and that's that.

Login or Join to leave a comment
Login Join