Is Your Handbag Tax Deductible?

If you use a handbag in the same way that a briefcase is generally used, the ATO admits you may have grounds to claim a tax deduction on it.

In a recent interview with, Assistant Tax Commissioner Graham Whyte confirmed that there are ways in which tax claims can 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”.

Although handbags still have the “hallmarks” of private expenditure he said, “it is the use of the item rather than its description that is relevant”.

Briefcases have a long history of being generally tax deductible, provided of course that they are primarily used for work purposes.  But handbags have traditionally been considered fashion accessories and not deductible under tax law.

Given that more women are using their handbags to carry laptops, tablets, mobile phones and work papers to and from the office, the line between whether a handbag is primarily used as a work or personal item has become blurry.

To be able to provide some evidence of a handbag’s function as a work-related item in the event of an audit, we advise clients to keep a logbook of the items that are carried in a professional capacity for a period of up to 3 months.

However, caution is urged when considering making claims for a particularly expensive handbag as a work item, as the Australian Taxation Office may be more likely to see this as a private, rather than work related, expense.

And for the modern men of the world who would also wish to glean some benefit from this opportunity, fear not. Manbags used primarily for work purposes are also likely to be assessed according to the same criteria as handbags and briefcases, making them tax deductible in similar circumstances.

For more information on what is tax deductable and what to bring to your appointment please click the hyperlink below to view our tax return checklists.

Individual Tax Retun Checklist

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