When it comes to claiming tax deductions for watches or smart watches, the rules are actually quite specific – the main takeaway I noticed here, though, is that there’s generally only a few exceptions, and in the majority of cases they’re just considered as a private expense and therefore not deductible.
Watches
Again, even if this is something you’re using for your job, more often than not the watch isn’t going to be deductible – whether it’s a traditional wristwatch or some other kind of timepiece.
Having said that, there are still a few exceptions for any watches that have special characteristics for work-related purposes.
Example
Travis, a nurse, purchases a fob watch for $150 that he wears exclusively during work hours (he’s not allowed to wear a normal wristwatch for hygiene reasons – this is a necessary tool for his profession, meaning he’s able to claim a deduction for this expense.
Smart Watches
Similarly, smart watches are also usually considered private expenses which makes them non-deductible. The only exception here is if you need the smart watch’s features to perform your job duties – even then you need to maintain a diary or records of the watch’s work-related usage.
Example
Clara, a personal trainer, buys a smartwatch to check messages while working, although his employer provides all necessary tools for her job. However, since message-checking is not part of his employment duties, Clara cannot claim a deduction for her smart watch.
Expenses You Can Claim
If you’re actually eligible for a deduction, you’ll fortunately be able to claim the cost of:
- Buying the watch
- Maintaining it
- Making repairs
- Buying batteries
Furthermore, if the watch costs you more than $300, you need to claim the decline in value over its effective life (deductions must be apportioned for any private use of the watch).
Example
Steve, a police diver, uses his diving watch for both work and recreational diving – here he’s able to claim a deduction for the watch’s decline in value, but only for the portion related to his work use.
Contact Advisory One Today
Make sure you’re maximising all your eligible tax deductions today by getting in touch with our team of chartered accountants. Don’t miss out on potential savings, and contact us now by calling 02 6324 5888.
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