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Tuesday, 5 December 2023

Ten deductions you may be able to claim this tax time

Have you covered all your bases this tax time? Here are 10 deductions that virtually all professionals are eligible to claim. Picture Shutterstock
Have you covered all your bases this tax time? Here are 10 deductions that virtually all professionals are eligible to claim. Picture Shutterstock

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We're finally in June and you know what that means: tax time is right around the corner.

Now is the time to start finalising your binder full of the year's receipts, invoices, and other work expenses so that you can claim back as much as you can.

But have you covered all bases?

There are likely to be plenty of expenses that you may not even be aware that you can claim back.

That's why we've compiled this list of 10 deductions that virtually all professionals are eligible to claim.

So read through this list in full before your next appointment with your tax agent, just so you can come prepared with all the documents you need to claim back in full this tax time.

1. Corporate gifts and donations

Did you know that all Australian tax deductible donations made by yourself or your organisation can actually be included as a deduction in your tax return?

There are only two stipulations required in order to qualify.

First, your donation does have to be tax deductible, and secondly, that donation needs to have been made within that particular tax year, as is the case with any other invoice.

Similarly, any receipts from corporate gifts can also be claimed back, but only if they're given to a registered deductible gift recipient (or DGR).

Most Australian charities, not-for-profits, and government agencies are registered as DGRs, but corporations and companies operating within the private sector are ineligible for DGR endorsement.

2. Travel and transportation expenses

If you commute to work everyday, you can actually claim back your public transport costs on your tax return.

The same goes for any Uber or taxi rides to the office or to meetings, as well as flight or boat tickets, so long as the transport tickets are purchased for work purposes.

You can even claim hire-car fees, toll fees, or even parking fees back on your tax return, which is likely to bring much relief to employees who work in offices that have no attached parking.

Like all deductible expenses, however, you do need to keep clear-cut records of your travel costs.

This means collecting all parking receipts (or using payment history in your parking app), as well as ensuring that all your public transportation costs that you're looking to claim align with your work days.

3. Insurance and super

Believe it or not, but you can actually claim back a portion of your home insurance if you operate a business out of your home, just as landlords can claim insurance costs on their rental properties for the period of time that that property was tenanted over the financial year.

Even the premiums that you pay for any income protection insurance or business insurance can be claimed back on your tax return, so be sure to keep those statements handy in time for your final meeting with your tax agent before June 30.

And while you are putting your insurance statements together, it's also well worth gathering records of any personal super contributions (i.e. contributions made directly from your bank account) as well as the original costs of any investments you've made over this past financial year.

These investments can vary from share dividends, account fees with any savings accounts, and others. Be sure to consult with your tax advisor for more information on claiming back costs associated with your personal investments.

4. Uniform and workwear costs

Regardless of whether you wear a company uniform or a pressed suit to work every day, you can actually claim back the expenses associated with dressing for your workplace.

So any suits, shoes, or other clothing or attire that you wear on a daily basis in your professional life is indeed tax deductible. Be sure to save all your receipts when shopping for workwear.

And on that same note, the costs of upkeep or the maintenance of that workwear is also considered a professional expense and is thus, also tax deductible.

For example, if you get your work clothes dry-cleaned on a weekly basis, these cleaning expenses are just as tax deductible as the purchase of the clothing itself.

5. Office equipment

Do you use your own computer in the office?

Or buy your own stationery?

Do you bring your own reference books or buy your own industry magazine subscriptions?

If so, you'll be happy to hear that all of these expenses are also tax deductible.

Once again, you just need to keep records of all these purchases, and be able to prove that these assets were purchased for professional purposes and not for personal use.

If any of the items are used for any percentage of personal use, this ratio of professional vs. personal use must also be specified so that the ATO can determine what percentage of that overall cost you're eligible to receive back in your tax refund.

6. Working from home expenses

Do you pay for a larger internet plan in order to work from home?

Or were you required to invest in a higher quality webcam or a more powerful router to support your WFH activities?

Then you can indeed claim back the costs associated with securing and using these WFH assets back on your next tax return.

Even your household energy bills can be claimed back to an extent, depending on what your WFH schedule looks like and the estimated cost of utilities on those WFH days.

And if you've purchased expensive home office equipment and furniture (i.e. a desktop computer, a desk, and even an ergonomic office chair), then you may even be eligible to claim depreciation of those assets back on each consecutive tax return.

You can calculate depreciation independently using the ATO's guide on the subject, or refer to your dedicated tax agent for a tailored depreciation schedule for all your professional assets.

7. Mobile phone plans

Do you have a business mobile?

Or are you a business owner who pays mobile plans for members of your staff?

If you've answered 'yes' to either of these questions, then you'll be happy to hear that you can claim your business mobile plans back on your tax return.

Be sure to maintain all monthly bills and any other receipts or records associated with your mobile plan.

And if you purchased a phone outright or as part of the plan, keep record of the payments made on that device, as these are also tax deductible.

8. Union fees and other professional memberships and accreditation fees

Are you a member of any workers' unions?

Or do you actively pay for a membership to an industry body?

Well so long as these membership expenses are relevant to the industry that you primarily work in, then you likely will be able to claim them back on your tax return.

Similarly, the costs associated with procuring any required industry or professional accreditations are also tax deductible.

So if you need to maintain a paid employee working with children check or secure an RSA or RSG, then the costs associated with securing these accreditations can also be claimed back on your tax return.

9. Professional education and training expenses

Upskilling is a highly effective way of progressing your career and presenting yourself as a far more attractive job candidate.

But as is the case with any investment, upskilling (as an investment in yourself) does come with its own price tag.

The costs associated with enrolling in short courses or even attending industry seminars, can really start to add up.

Thankfully, you may be surprised to hear that the majority of costs associated with your professional education and upskilling are actually also tax deductible.

This means that any tickets you purchase to industry events like conventions or seminars, can be included in your tax return.

Similarly, enrollment costs for any short courses or even subscriptions to services like LinkedIn Learning, are also tax deductible.

So go forth and educate yourself.

10. Costs of lodging your tax return

Typically, the last item on any list of claims you can make on your income tax return is the cost of preparing and lodging your annual tax return itself.

You can actually claim back the costs of your appointment with your tax agent, if you're lodging through this agent.

And what if you're looking to lodge your tax return independently?

Well, if you've paid for any short courses that teach you how to do so, the cost of that course is actually also tax deductible, as are the costs of any taxation software that you're using to help expedite your lodging process.

After a skim of this little list, you should have a much stronger understanding of exactly what you can claim at the end of the financial year, and what documentation you'll be needing in order to make these claims.

Be sure to consult with a tax professional if you have concerns about any of the deductions you're looking to make this year.

And remember - you can never have too much evidence to support your claims.