Aussies have discovered a surprising item they can claim on their tax returns this year – and it’s something thousands of people use every day.
Financial content creators Sal and Al, who use Two Broke Chicks on TikTok, revealed that handbags ($300 and under) can be claimed as a tax deduction in many cases.
“You can actually claim the cost of a handbag, but it must be used and suitable for work purposes,” the pair said, adding that “your little Jacquemus doesn’t have enough for it.”
“A more modest bag used for work may qualify for a deduction… this is the sign to treat yourself to a new work handbag if you need one.”
And it seems many are, with fashion label Alf The Label confirming that bags are flying off the shelves this time of year.
Sal and Al, who go by the name Two Broke Chicks on TikTok, revealed that handbags ($300 and under) can be claimed as a tax deduction in many cases
Louis Vuitton’s Atlantis BB bag would be an unlikely candidate for a $4,400 refund, with a small, chic design that wouldn’t be practical enough to use just for work
“There are a lot of girls buying right before tax time,” they said, before warning shoppers to make sure the order confirmation contains the required tax information.
To be eligible, the bag must be used for work and ‘only for work purposes’.
Bags used to carry personal items such as lunch, gym clothes or makeup are not eligible.
Handbags must meet stricter ATO criteria than briefcases, laptop bags, school bags and luggage. If your handbag passes the test and costs less than $300, you qualify for an immediate deduction.
If the bag costs more than $300, you can only claim a deduction for the decline in value over the effective life of the item.
However, financial expert Molly Benjamin, founder of Ladies Finance Clubis warning Australians not to become overconfident in claiming their handbags.
“I wish I could claim a handbag for my tax expenses, but unfortunately, I couldn’t,” she told FEMAIL.
‘However, if it is a laptop bag that is intended solely for work purposes and should not be used for private use, then you are fine. I mean, who wouldn’t want to claim their business work attire, but it’s the same story.
‘Unless it has a logo on it or it’s unique to your job (think chef’s hat and checked trousers), the ATO won’t pass it up!’
Ms. Benjamin advised to “exercise discretion” and be aware that you are in fact “taking a bit of a gamble if you go ahead and claim it.”
‘To be safe, stick to those logo-branded items or unique work-specific items – and I don’t think linking a logo to a coach is going to work (again, we want to)! ‘