Are Dental Costs Tax Deductible? – Find Out Now
A question you may have always wondered the answer to – are dental costs tax-deductible?
In Australia, all medical costs, such as dental work, can only be claimed on your tax return if they relate directly to your source of income.
If you are an actor or actress, performing artist, or model, your job is dependent upon your looks. This means that your dental costs are considered essential to your occupation, and thus are tax-deductible.
Today I will talk about tax expenses, such as what is classed as a “private expense”.
I will discuss when you can claim dental costs. I will discuss what expenses are considered essential to your job. Lastly, I will discuss who you should speak to, in order to confirm these expenses.
Please note: Information found within this post has been sourced and referenced by professionals and is intended for informational and educational purposes only. We do not know your individual circumstance and therefore it is advisable and recommended to seek direct advice and consultation with either your dentist and/or your tax accountant.
What is Classed as a “Private Expense”
A private expense is classified as anything that is not “work-related”.
So, these expenses do vary depending on exactly what industry your job is in.
But basically, a “private expense” is anything that is unrelated to, and deemed unnecessary for, the income that’s derived from your occupation.
I will discuss this in detail under the sub-heading “What Is Considered Essential to Your Job or Role?”.
But now I will go over what occupations classify dental costs as a “work-related”, rather than “private”, expense.
When You Can Claim Dental Costs
Dental costs are known as “grooming expenses”.
The Australian Taxation Office (ATO) is quite strict when it comes to claiming these, as they are often considered “private expenses”.
So, you may be able to claim dental expenses as a work-related tax deduction, ONLY IF;
- It is essential for your role (that is, it is directly related to the income that you are receiving).
Generally speaking, everyone who works in the public eye wants to look and feel well-groomed.
It may even be expected of you, in many of these roles, that you appear well-presented.
However, this means that, in a lot of these occupations, your employer will pay you an allowance for grooming.
As such, all further grooming expenses are considered “private expenses”, and are therefore not tax-deductible.
So, the ATO deems a very small number of jobs actually necessary for grooming products or services, such as dental work.
Work-related Tax Deductions for Dental Work
To help you figure out if you are eligible to claim a work-related tax deduction for dental work, I have run through the requirements of the ATO below.
For your dental work to qualify as being tax-deductible, you must have;
- A job that considers grooming expenses essential for your role – that is, an actor/actress, performing artist, or model.
- A direct connection between the cost of the dental work, and the occupation that earns you income.
- Paid for all the work yourself and were not compensated by your employer.
- A receipt or invoice for the dental work (to be kept for 3 years after filing your tax return, as proof of purchase).
What these roles have in common is their looks need to be maintained, or even changed, for the sake of their role.
Meaning, their teeth are directly related to how much money they can earn, as they have an effect on how many roles they are able to get.
For example, there have been many Hollywood actors who have changed their teeth for a movie.
In 1999, for his role in Fight Club, Brad Pitt had a Dentist remove the fake portion of his front tooth, to reveal his chipped tooth.
In 2018, to play Freddie Mercury in Bohemian Rhapsody, Rami Malek wore prosthetic teeth to recreate Freddie’s overbite.
In every pirate of the Caribbean movie, Johnny Depp wore gold crowns.
More actors who have had Dental work performed to play a role in a movie can be seen here.
It is also worth noting that the ATO has revealed that, in the past, many taxpayers have used;
The “other deductions” section of their tax return to try and claim their medical expenses, such as dental work.
For example, certain taxpayers had claimed the cost of all of their dental work prior to having a job.
Their claim was that a nice smile was required to find them work, and thus all costs were deductible.
This is certainly not the case and was denied by the ATO.
- “Other” deductions must still be directly related to earning income (for example, from an investment property, such as a granny flat that is being rented out).
Hence why all these claims were disallowed in full by the ATO, as they are a “private expense”.
What is Considered Essential to Your Role or Job?
Anything that is considered essential to your role or job, is something that;
- Is required for you to perform your job, and necessary for you to get paid, regardless of what job you do.
Meaning, the deductions that you can claim are directly related to the income you earn, such as expenses for;
- Vehicle/s and travel, to and from work.
- Clothing, laundry, and dry-cleaning (for work clothes only).
- A home-office.
- Self-education (only when required to learn for your role).
- Tools, equipment, and other goods (that are for your occupation).
- Any other work-related outlays.
These costs all come under the “work-related” expenses section of your tax return.
Exactly what you can and cannot claim for your specific industry can be seen at the Australian Taxation Office’s website.
Who You Should Speak to, to Confirm These Expenses
It is important to note that all information provided in this article is correct as per the Australian Taxation Office’s website in 2020.
Thus, it is subject to change.
It should only be taken as generic information, rather than constituting financial or accounting advice.
As such, to confirm all expenses, I suggest that you speak with either a;
- Qualified tax accountant, or
- CPA (certified practicing accountant, who is a trusted financial advisor).
Either one of these two professionals will assist you with determining;
- Exactly how much you can claim on dental costs as a tax deduction, as it all depends upon your personal circumstances.
Unless you are in an occupation where your appearance is entirely dependent upon your source of income, dental costs are not tax-deductible.
These jobs are few and far between.
The Australian Taxation Office (ATO) classifies these as “grooming expenses”. They are very strict as to who they will pay these out.
This is as, in many jobs, for example, a media professional or flight attendant, it is expected of you that you will appear well-presented.
However, in these occupations, your employer will pay you an allowance for grooming.
As such, the ATO will classify any further grooming expenses as “private expenses”.
The roles that will be able to claim dental costs as a tax deduction are;
- Performing artists.
- Actors/actresses, or
This is as their jobs all have the below factors;
- The grooming expenses are essential – meaning, they need to maintain or even change their looks for their work.
- There is a direct connection between the cost of dental work, and how they earn their income – meaning, the look of their teeth will impact how much money they make.
- They will pay for any dental work themselves, without being reimbursed by their employer.
There have been taxpayers that have tried to claim their dental work under “other expenses” in the past. These were;
- A “private expense”, as they were not related to earning income, and
- Disallowed in full by the ATO.
So, it is important to note that if the ATO believes you;
- Made an honest mistake when doing your tax return, then they will simply disallow the claim.
- Intentionally made a claim that is dishonest, especially one for a large sum of money, they may charge you with a fine.
So, remember, when claiming your tax deductions, they cannot be for what is considered “private expenses”.
To find out more about what deductions you are/aren’t eligible to claim, visit the Deductions page of the ATO’s website.
For more information about the fines for giving an incorrect or misleading tax return, view their Penalty page.
The ATO also has a myDeductions app to make it easier for you to keep a record of your expenses and income.
It is important to remember that the ATO requires receipts for all expenses that you claim – and yes, they do check.
They now have the authority to check your bank account records, and other sources, to make sure that all claims you have made are totally honest.
So, remember to keep all receipts for at least three (3) years after you have filed your tax return, as a record of the expense.
I also suggest that, if you want more information on whether are eligible to claim a tax deduction on dental costs, that you contact an either a;
- Qualified accountant or,
- Certified practising accountant (CPA).
*Please note that all information in this article is general. It has been gathered from the Australian Taxation Office’s website, but it may change.
By Andrew Adams
Created at October 16, 2020, Updated at September 30, 2021