Top Tax Deductions Australians Often Miss (and How to Claim Them!)
Top Tax Deductions Australians Often Miss (and How to Claim Them!)
Tax time can be stressful, but it doesn't have to be! Many Australians unknowingly miss out on valuable deductions, leaving money on the table. This blog post will highlight some of the most commonly overlooked tax deductions and provide tips on how to claim them. Remember, keeping good records is key to maximizing your return!
Working from Home (WFH) Expenses:
With the rise of remote work, home office deductions are more relevant than ever. Many people underestimate what they can claim. Are you working from home, even occasionally? You can likely claim a portion of your:
Running Expenses: Electricity, gas, internet, phone bills – the portion related to your work. Keep detailed records of your usage or use the fixed rate method for a simpler approach.
Occupancy Expenses: Rent or mortgage interest, property insurance, rates – a portion based on the area of your home used exclusively for work.
Depreciating Assets: Home office furniture, computers, printers – claim depreciation on these items.
Self-Education Expenses:
Did you undertake any courses or training to improve your skills in your current job? You can often deduct the costs, including course fees, travel expenses, and books. The catch? The course must have a direct connection to your current employment. A career change course generally isn't deductible.
Work-Related Clothing and Laundry:
If you're required to wear a specific uniform or protective clothing for work, you can deduct the costs of purchasing and maintaining it. This includes laundry expenses! Keep receipts and a log of laundry expenses if you don't have receipts.
Tools and Equipment:
If you purchase tools or equipment necessary for your job, you can generally claim a deduction for their cost. This applies to a wide range of professions, from hairdressers to builders. Depreciation rules apply to more expensive items.
Charitable Donations:
Donating to registered charities is not only a good deed, but it can also reduce your tax. Keep your receipts! Donations must be to deductible gift recipients (DGRs) to be claimable.
Medical Expenses:
While the offset for medical expenses has changed over the years, you may still be able to claim a deduction if your net medical expenses exceed a certain threshold. Keep all your medical receipts throughout the year.
Other Often-Missed Deductions:
Union Fees: If you're a member of a union, you can deduct your union fees.
Income Protection Insurance: Premiums paid for income protection insurance are usually deductible.
Car Expenses: If you use your car for work purposes, you can claim a deduction for car expenses. Keep a logbook for 12 consecutive weeks to substantiate your claim or use the cents per kilometre method.
Personal Super Contributions: If you make personal contributions to your superannuation fund and don’t claim a deduction, you might be able to claim a tax offset.
Tips for Maximizing Your Deductions:
Keep Accurate Records: This is the most crucial step. Keep all receipts, invoices, and logbooks related to your expenses.
Use the ATO App: The myDeductions tool in the ATO app makes it easy to track your expenses throughout the year.
Understand the Rules: Familiarize yourself with the specific rules and requirements for each deduction. The ATO website is a great resource.
Seek Professional Advice: If you're unsure about any deductions or have complex tax affairs, consider consulting with a tax agent. They can provide personalized advice and ensure you're claiming everything you're entitled to.
Don't let those deductions slip through your fingers! By being organized and informed, you can maximize your tax return and keep more money in your pocket. Remember, this information is general in nature and doesn't constitute financial advice. Always consult with a qualified professional for personalized guidance.