Deductions provide taxpayers with an opportunity to reduce their taxable income, therefore reducing the quantity of tax payable. They can however be tricky to work out and, as a result most people are very cautious about dealing with them or avoid them entirely!
For the uninformed, here is a breakdown of the basic deductions you can claim:
- Work related car expenses
There are two methods for you claim your car expenses.
The first is with a logbook. Here you are required to keep all your receipts of your car expenses, such as fuel, rego, insurance, services/repairs, parking, and even car loan interest. You can then claim a proportion of all the payments you spent.
Another method is the set rate method. Here you calculate the approximate number of kilometres used for work purposes. Note the maximum amount claimable is 5000km. The value per kilo you can claim is 66 cent.
- Work related clothing/uniforms
This covers only clothing/uniforms with logos, branding or in company colours. Items of apparel such as work shoes, protective glasses, sunscreen and dry cleaning can also be. Note there may be industry specific items. It is important however that you keep any purchase receipts. According to an ATO ruling, you may also claim laundry expenses between $144 and $150/year without receipts.
- Work related self-education expenses
Course and tuition fees may only be claimed where there is a direct connection between education and your current work activities. In order to claim these you will need the name of course, the institution and tax invoices for your fees.
- Other work related expenses
There are a large number of expenses claimable in this section. They include (but are not limited to):
- Union fees (e.g. nurse union, teacher registration, etc)
- Books and journals
- Home office (charged at a set rate of $0.45/hour)
- Computer expenses (including software and hardware depreciation)
- Tools and equipment used for work
- Newspapers and other relevant subscriptions
- Mobile phone (can claim a percentage monthly if used for work)
- Internet access (can claim a percentage monthly if used for work)
- Printing, postage and stationery
- Tolls and other travel expenses (e.g. Flights, meal allowances etc)
Donations over $2.00 are fully tax deductable. Note that you are required to keep a receipt of the donation in order to deduct it.
So, those are the basic tax deductable areas for an individual tax return. Make sure you let your accountant know before they lodge – you might be able to get a better outcome!
If you have any questions about tax deductions or would like to book in for a tax return, feel free to email our team at firstname.lastname@example.org or call on 07 5444 1022