Hi all,
Has anyone been successful claiming a custom built PC on tax before? I do IT and WFH occassionally. However, let's just say that the specs of my PC "are required" to do my job effectively.
Claiming $4000 Gaming PC on Tax
mu11yy on 02/07/2024 - 15:25
Comments
Wow. Seems like OP in that post had a lot of trouble come to him. This is my first year earning enough to pay tax, I honestly don't know much tbh
This is my first year earning enough to pay tax, I honestly don't know much tbh
starting out in year 1 attempting some questionable 'tax minimisation' strategies.
You're bound for great things :)
This is my first year earning enough to pay tax, I honestly don't know much tbh
What salary range are you in? Because depending on that could give you issues. Someone earning $60k trying to claim $4k plus more in deductions, bound to raise questions.
But someone earning $120k, probably not going to have as many issues.
I'm on the lowest tax bracket. At this point I think I'm going to just claim smaller items instead and speak to someone more knowledgeable and get some proper advice.
@mu11yy: Yeah, lowest tax bracket is going to be an issue when claiming $4k plus other deductions. It isn't worth it. Just claim what you can and any other extras. Definitely get an accountant, it will help.
@mu11yy: Just claim genuine, deductible expenses and you will be fine. Don't make the mistake of thinking that because the ATO system 'let' you claim something, that it is valid or legal.
Basic rule of thumb, it's better to err on the side of caution. The ATO will "let" you claim whatever you want but then come back at you with an audit later on, which will be even more painful (especially if it takes them 2-3 years). They will usually start with a single item then keep digging through everything else. It's not worth the hassle and what you save - and once you earn enough talk to an accountant about how to structure things and what to claim.
One big problem with big ticket items is every few years the ATO will jump on a new one, they're talking a lot about vehicles this year, if it's gaming PCs in 2-3 years it might come back to haunt you.
Someone claiming a single $4k expense item is a red flag in itself. No one spends $4k for work unless they work in very specific industries or earn a pile of money. I got a warning when I did my tax return last year that the prior year I had claimed a $3k training course and that was "unusual" for people in my role (despite that I'm a chartered accountant, I earn a nice income, I do a lot of training and this was a real one off expense).
If you're going to claim it, claim it for how much you used for work. But really it's probably easier to claim the fixed rate method, unless you had a lot of other costs as well.
Yeah, expenses conveniently being more than the tax paid…
Guy was a walking ATO target.
Bottom line is that if the PC was genuinely purchased for work purposes (ie earning an income), either partly or completely then its tax deductible.
OP must declare the amount of private use.
OP can only claim the portion used for business/work use.
OP may be required to supply proof of how they arrived/calculated thier tax deduction claim.
Given its a gaming PC its doubleful it would be acceptable to the ATO.
Wow, you're seriously thinking about defrauding the Commonwealth via the department you're going to have to deal with once per year for the rest of your life?
You've not thought this through.
Also, with respect, MUCH smarter people than you have tried.
WFH occassionally
This is going to be your issue. You would only be able to claim the % you WFH on it. So if you are home 50% of the week, then you can claim $2000 of it.
Its the same for someone that uses their car for work or via a business. You can only claim the % used for business, not all of the runnings costs. Now you only need a 3 month log for this, so for 3 months if you used it 90% of the time for business, then you can claim 90% of the vehicles costs for the entire FY year. I hope that makes sense.
Same thing goes for Phone, you can only claim the % you use your mobile phone for work/business. So if you use it 90% of the time for work, then you can claim 90% of its costs during that FY.
This is just based on what I have been told from my accountant and my past experiences. I have been audited once before and only had 1 item questioned.
Thanks for this. Looks like it's more trouble than it's worth.
Yeah, it could be. Especially for your first year of paying tax.
Maybe look at going through an accountant, I've had one for a number of years and it has been really good. I know a lot of people say, "but you can do it yourself", but they just make the process easier and help you claim things (like computers). It costs me about $200 once a year, so it isn't too much of a cost.
And the bill is tax deductible! Sorry, had to write it.
Yep, exactly this. My accountant has told me that I can claim a new PC and the fact that I did actually perform work activities on it. Had to give a % of work use on it and that then reflected how much of it I could claim.
Yes but not the whole cost, only the percentage of the cost that I could substantiate that I use it for work vs personal and depreciated over a number of years. The specs aren't really relevant but trying to claim the whole thing risks being flagged for audit.
Have a geez at this, guvna: https://www.ato.gov.au/api/public/content/7a6706d5-2502-46ce…
You can go the Fixed rate method, or Actual cost method. Either way you can't just chuck the whole $4k on there and say it's for work. Or you can, but take a chance at being investigated.
Nice post ATO.
You can apportion it based on your overall WFH use of that computer. Keep a log or have some other system/method. If the computer is used 1/3 for work and 2/3 for private purposes then you can apportion 1/3 of the cost. If you are not a small business then you can only depreciate it - you can't write off the entire cost.
With a few exceptions (e.g. initial purchase price of vehicle), the tax legislation is based on apportionment, and it does not matter re: the physical attributes of the item. I can buy a sports car as my work vehicle, use my logbook to apportion expenses and then write off the maintenance pro rata. It does not matter whether the work vehicle is a Fiat or a Ferrari.
Likewise with your computer. If your gaming computer also serves as your main WFH computer then you can apportion.
claiming a custom built PC on tax
you can claim a portion of it. Also it would need to be done over a few years. Talk to a tax agent.
Nekminnit has a work laptop provided by employer
Nothing says you have to tell the ATO that. You just have be able to prove you used your desktop for work when auditted.
ATO doesn't care about the specs as long as you can provide proper substantiation for work usage.
Lol people mistaken bargain with fraud
Who’s mistaking it
You will need to depreciate it over a number of years (cannot claim the full amount in one year), & you can only claim the % used for work.
It will not be as lucrative of a deduction as you think, which is why Australians are obsessed with negative gearing into property
I've heard the term negative gearing a lot on here. What's the deal with it?
Negative gearing is claiming the tax deductable expenses for an investment. Where the short term expenses are greater than the short term income creating a loss that can reduce other income. Could be the interest paid on shares or an investment property or probably even comic books if you can show an income from trading them. It's deferred income in a way though, because you then pay capital gains tax if you divest the asset for a profit.
I was going to upvote you for explaining depreciation, but then you went off track into negative gearing.
Everything you said in your first sentence applies to property also, and negative gearing applies to all investments.
What did your accountant say when you asked them?
you can start by not referring to it as a gaming PC 😭
If you work in IT and you are expected to work from home, then your employer will be providing you with a device to perform that work from home. The ATO know this. If you try to claim a computer, they will be on you so easily.
What might not be provided by your employer are: Desk, Chair, Floor mat to protect from chair, mouse pad, keyboard / mouse for correct posture when working, monitor stands, potentially monitors (if you could be sure that your work would benefit from such additional monitors at home, i.e. you have equivalent at work itself).
But then you need to put all of those through the appropriate usage criteria (i.e. it has to be predominantly purchased and used for work purposes, and has to be cost commensurate to an equivalent item that the company itself may procure… i.e. a $16k gaming chair would be hard to justify to the ATO.. both for your employer, and equally for you).I think if you work in IT, you'd struggle to successfully claim these things, since your employer should already be all over this and have a comprehensive working from home package (where working from home is expected).
You definitely need the high-end GPU to develop a new LLM as part of your AI upskilling …
You'd be either stupid, silly or foolhardy to try and claim 100% of the value of a gaming PC for work purposes (and I could be wrong here, but I believe it'd need to be depreciated over say 3 years, not written off). ATO run all sorts of AI looking for these types of abnormalities.
Just claim 50% for work purposes and you'll probably slip under the radar.
Just remember you claim the % of time the device is used for work. Claiming 100% on a $4k device is looking for trouble.
Also, even if you did it would be $4k depreciating over 3 years for a lappy, not sure about desktops.It's not what it is, it's how it's used.
I wrote off my $5k build with IAW a few years back with no issue.
I'll just leave this here for you to read.