Tax time can be seen as a headache for some and a blessing for others. No matter your situation, it’s always a good idea to be on top of things at tax time. Deductions can ease the sting of doing your tax return by maximising your refund. Our team at Tax Return have put together a list of deductions and tips to ease the stress and panic surrounding tax season.
Our top 3 tips before even thinking about what deductions you can or cannot claim are:
- Engage a tax agent – getting help from professionals who know the in’s and out’s will ensure you get the most out of your return whilst staying compliant.
- Lodge on time – lodge after July 1st and before October 31st to avoid any late lodgement penalties. However, lodging through a registered tax agent can extend this time period.
- Keep receipts – generally speaking, you can claim up to $300 of work-related expenses without receipts. Anything over $300 will need to be recognised for proof of purchase with a receipt.
All taxpayers are entitled to claim deductions when you spend personal income relating to your job. The most common deductions are directly linked to your work-related expenses. These can include things such as vehicle and travel, clothing and laundry, home office expenses, mobile, home phone and internet, overtime meals, self-education expenses and tools and equipment. You may not claim a deduction if you have already been reimbursed by your employer for money you spent.
Vehicle and travel
Vehicle expenses including fuel, repairs and maintenance are claimable through cents per kilo or the logbook method, provided that the travel was for work purposes, you were travelling from one place of work to another, and/or the travel was not from home to work or work to home. Travel to or from home is considered private travel and is not claimable as an expense. The most popular travel expenses include transport receipts such as uber or taxi rides.
Clothing and laundry
You may claim deductions for the cost of purchasing and washing work-specific clothing and uniforms out of your own pocket. Certain protective clothing such as fire-resistant or sun-protectant clothing, high-vis clothing, certain safety boots including steel-capped boots and smocks or aprons worn to avoid damage to skin or other clothes are a claimable expense. If you are making a claim for a work uniform, it must be a distinct uniform that is identifiable as a compulsory work uniform, often including a company logo. You cannot claim the cost of ordinary clothes worn at work. You may claim the cost of laundry expenses for cleaning your work uniform although you must have evidence (receipt or diary records) if your laundry claim is greater than $150 and your total work-related expenses is greater then $300.
Home office expenses
If you are one of the many Australians who often work from home, you may be able to claim deductions for certain expenses relating to your job. To be able to claim expenses for work completed from home, more often than not you will need to have a dedicated work area, like a study for example, where you perform your work duties. You may be able to claim electricity and gas usage, work-related phone calls and internet costs, decline in value of computer or office equipment (work related portion), and costs of owning or renting the house – for example, mortgage interest or rental payments. If your entire business is run from home, you would need to have an entire room solely designated for work purposes to be able to claim the previous deductions.
You may be eligible to claim self-education expenses as a deduction if the self-education relates to your current position at work and leads to a formal qualification. You cannot claim a deduction for self-education for any course that doesn’t directly relate to your current position at work or enables you to get new employment. These deductions can include but are not limited to:
- Education workshops
Any donation made to a registered charity or organisation is deductable if the amount donated was greater than $2. The donation must be gifted and is not a deductable claim if something was received in return. You cannot claim any donation in which you receive any form of personal benefit. For example: raffle tickets, the cost of attending fundraising dinners, payments made to school building funds and membership fees.
If you would like to know more about what you may or may not be able to claim, our team at Tax Return are here to help! We’re open all year round to help you make the most out of your return. Contact us today!