Claiming the costs for deduction
Scenario:
I am employed on a fixed-term contractual basis as a lawyer. I store most of my professional library and office records in a self-storage facility. I access these items at the storage facility from time to time for use in my work. Can I claim the cost of using the self-storage facility as a deduction against my employment income?
Explanation:
Storage expenses are not specifically listed as expenses that are deductible in Taxation Ruling TR 95/9. The presumption by the ATO on an investigation would probably be that they are private in nature with the onus clearly on the taxpayer to demonstrate that the storage is for work purposes (i.e. the purpose of earning assessable income under s 8 of ITAA 1997). Your office records would be personal unless you are carrying on a business – that you have a business is not apparent from these facts. In relation to claim for storage rental on the professional library, the taxpayer would be assisted on an investigation if you had:
• A list of all items being kept in storage so you could demonstrate their work-related nature and a pro rat out, by volume, of any private items, or
• A letter or an acknowledgement from the employer in the employment agreement that you are unable to keep the professional library at your place of work, but you are nevertheless required or encouraged to consult your library from time to time for work purposes with records of when you do so.
If some part of your salary was given in the form of an allowance to meet the storage rental that would further assist (see Taxation Ruling IT2198) and an account for rent from the storage facility provider for substantiation purposes.