LAUNDRY
If you use your washing machine to wash clothes, linen and other day care items, you will be able to claim a deduction for any expense you may incur in this regard. Where you use your washing machine and/or dryer for both private and day care purposes it can sometimes be difficult to calculate your deduction value.
Basically you have the choice of two different methods for calculating your claim for laundry expenses.
1. Cost Per Load Method
You may also calculate your claim for washing day care items using a cost per wash cycle. The tax office accepts a claim of $1.00 per wash cycle where you only have day care items and no private items. If you combine day care items with private items you are only entitled to claim 50c per wash cycle.
In order to use this method you should keep a diary of the number of loads of washing and their content (i.e. whether the items being washed are only day care items or whether some private items are included in the wash cycle) over a four week period.
2. Actual Cost Method
As indicated in the name, this claim is based on the actual costs you incur for washing day care items. The following example outlines how you calculate your claim using this method.
Example
Heather uses her washing machine 2 times a week to wash linen and other items used in her day care business.
She works out her cost of each washing machine and dryer cycle as follows:
If you use your washing machine to wash clothes, linen and other day care items, you will be able to claim a deduction for any expense you may incur in this regard. Where you use your washing machine and/or dryer for both private and day care purposes it can sometimes be difficult to calculate your deduction value.
Basically you have the choice of two different methods for calculating your claim for laundry expenses.
1. Cost Per Load Method
You may also calculate your claim for washing day care items using a cost per wash cycle. The tax office accepts a claim of $1.00 per wash cycle where you only have day care items and no private items. If you combine day care items with private items you are only entitled to claim 50c per wash cycle.
In order to use this method you should keep a diary of the number of loads of washing and their content (i.e. whether the items being washed are only day care items or whether some private items are included in the wash cycle) over a four week period.
2. Actual Cost Method
As indicated in the name, this claim is based on the actual costs you incur for washing day care items. The following example outlines how you calculate your claim using this method.
Example
Heather uses her washing machine 2 times a week to wash linen and other items used in her day care business.
She works out her cost of each washing machine and dryer cycle as follows:
| EXPENSE | COST | TOTAL |
| Depreciation of Washing Machine | $1,000 x 20% | $200.00 |
| Water | 8,000 litres per year @ $0.00171 per litre* | $13.68 |
| Electricity - Washing Machine | $9.00 per quarter** | $36.00 |
| Detergent | $7 per 20 washes x 104 washes per year*** | $36.40 |
| Depreciation of Clothes Dryer | $400 x 20% | $80.00 |
| Electricity - Clothes Dryer | $14 per quarter** | $56.00 |
| $422.08 |
The average cost per wash = $422.08 ÷ 104 = $4.06
However, if Heather washed her private clothes with her day care items the cost of a ‘business related
wash’ must be halved:
$4.06 ÷ 2 = $2.03 (rounded)
Heather must multiply the average cost per wash by the number of times she washed day care items.
$2.03 per wash x 2 washes per week x 48 weeks = $ 194.88
* The water usage for Heather’s washing machine was worked out by determining the amount of water used by her washing machine per cycle, and then multiplying this figure by the number of loads of washing for the year.The cost of the water per litre was obtained from her water bill.
** The electricity cost for Heather’s washing machine and clothes dryer were obtained from her local authority.
*** A bottle of detergent, which lasted 20 washes, cost Heather $7. Therefore, the cost of detergent per wash is$7 ÷ 20 washes = 35 cents per wash.
However, if Heather washed her private clothes with her day care items the cost of a ‘business related
wash’ must be halved:
$4.06 ÷ 2 = $2.03 (rounded)
Heather must multiply the average cost per wash by the number of times she washed day care items.
$2.03 per wash x 2 washes per week x 48 weeks = $ 194.88
* The water usage for Heather’s washing machine was worked out by determining the amount of water used by her washing machine per cycle, and then multiplying this figure by the number of loads of washing for the year.The cost of the water per litre was obtained from her water bill.
** The electricity cost for Heather’s washing machine and clothes dryer were obtained from her local authority.
*** A bottle of detergent, which lasted 20 washes, cost Heather $7. Therefore, the cost of detergent per wash is$7 ÷ 20 washes = 35 cents per wash.