The last thing salary/wage earners want to face every year is the tax return sent by the Inland Revenue Department, commonly known as the “green bomb”. When filing taxes, many people want to know more about tax deductions. It turns out that many people do not know that if it is “expenses and expenses incurred to generate assessable income”, if the following conditions are met, some special expenses such as clothing fees, entertainment fees, membership fees of professional societies, etc. are tax deductible. of.
Tax deduction for special expenses and expense items
In addition to claiming personal education expenses and deductible items for approved charitable donations, taxpayers can also claim all expenses and expenses incurred “exclusively, purely and necessarily for the generation of the assessable income”. Details can be found at the Inland Revenue Department’s See the guide.
This “special expenses and expenses” cannot be made on a family or private basis. These expenses are usually directly related to the work, such as clothing fees, entertainment fees, membership fees of professional societies, etc.
1) Tax deduction for clothing fees
The replacement cost of work clothes and special clothes that employees need to wear because of their employment can be deducted during the tax return process. In addition, other clothing expenses do not meet the “complete and pure” criteria and are not tax deductible.
2) Commission – tax deduction for service expenses
For employees who earn commissions, if they meet the conditions of “solely, purely and must be for the generation of the assessable income”, when paying commissions to others, the commission expenses can be deducted from tax, but the commission expenses need to be provided to the Inland Revenue Department and recipient details.
When deducting tax on the claimant’s entertainment expenses, the taxpayer should prove that the relevant expenses “must be incurred”, otherwise it is impossible to generate income from work. Expenses solely for social entertainment cannot be deducted.
Therefore, any tax deductions on entertainment expenses must be shown to be directly related to the business negotiation, and details listing these expenses, the name of the person receiving the entertainment, and the nature of the business need to be kept. Once the one-off entertainment allowance is larger than the deductible entertainment allowance, the excess will be counted as assessable income from the job or employment.
4) Tax deduction for assistant fee
Although the expenses related to “assistant” are generally not “necessary” to be incurred in the work, if the employee’s salary is calculated by commission, if it can be proved that the workload is heavy and it is necessary and necessary to be assisted by the helper, if the amount paid is also reasonable, the relevant expenses You can get tax deductions.
5) Professional bodies dues tax deduction
According to the “Inland Revenue Regulations”, membership fees of professional societies are generally not allowed to be tax deductible. However, if the employee’s employment is a prerequisite for the professional qualification, and it is useful from time to time to retain the membership and keep abreast of the latest developments in the industry and facilitate the performance of the job, such dues may be allowed to be deducted. However, the tax deduction is limited to “the dues of a professional bodies”, and the dues of the union are not deductible.
6) Tax deduction for transportation/automobile expenses
Except for transportation expenses from the residence to the office, reasonable transportation expenses to and from the two workplaces are allowed if they are necessary for the performance of duties.
In the case of claiming tax deduction for transportation/motor vehicle expenses, the Inland Revenue Department will evaluate whether the deduction is reasonable, including considering the comparison of public transportation and taxi services.
If a motor vehicle is required to perform duties due to the nature of the work, the claimant should provide the employer with a basis for these expenses and should also apportion the repair and daily expenses of the motor vehicle between official and private purposes.
The above information is for reference only. If you have any questions about tax filing, tax deduction, and accounting, we welcome your inquiries.