There are more to tax deductions than just claiming a few donations and some safety glasses. You may be eligible for many more deductions that you didn’t even realise. They may only equal $20 here or $50 there, but just remember that it all adds up across your return and that can lead to cash back in your pocket.
Here are our top 10 tax deduction tips for individuals to keep in mind for their income tax returns:
1. Working from home
In today’s modern flexible work environments, it’s not uncommon to work from home. As a result of this you may be eligible to claim a proportion of your home internet, mobile phone, stationery and laptop costs.
If you are self-employed and work from home you can even claim your electricity, gas and water costs at a rate of 45c per hour. Ask us if you unsure if you qualify for this.
2. Decrease in the amount you can claim for motor vehicle expenses
As many of you may know, the government has reduced the rate which you can claim for the per kilometre method. The new rate is no longer dependent on engine size and type, but instead is now a flat rate of 66c which will apply up to 5,000 km, resulting in a maximum deduction of $3,300.
If you think your motor vehicle costs are more than $3,300 for business use, talk to us today about how you can logbook your vehicle to maximise your tax deductions.
3. Work uniforms
Did you know you can claim up to $150 for the laundry and maintenance of a compulsory logo work uniform or safety equipment? You can also claim back the costs of any safety equipment such as steel cap or oil proof boots, protective glasses or other personal protective equipment.
4. Union and other professional membership fees
Are you a member of a union, or do you subscribe to any professional associations within your industry? You can claim these fees as a tax deduction. Often the amount you have paid to your union is listed on your group certificate, but you should be keeping track of how much you pay them yearly yourself.
5. Income protection
Did you know any income protection policies you have personally paid for are tax deductible? If you are paying for income protection make sure you keep the annual statement to claim it back at tax time. Income protection should not be confused with life insurance which is not tax deductible. Ask us if you are unsure of the difference.
6. Private health insurance
Earning over $90,000 as an individual or $180,000 as a family? If so, and you don’t have private health insurance you will have to pay the Medicare Levy Surcharge of 1% to 1.5% of your annual income, which is often more than the cost of the private health insurance!
7. Depreciation schedule for your rental property
Do you have a rental property? Yes? Then do you have a professionally prepared depreciation schedule? A depreciation schedule will unlock the maximum tax deductions for the wear and tear on your investment property come tax time. Speak to us today about the benefits of organizing a professional depreciation report for your investment property. This one tax deduction could be worth thousands to you and your family.
8. Self-study costs
One of the biggest grey areas we find is the lack of understanding what study costs are deductible and what aren’t. You can only claim self-study costs if you are upgrading or improving your skills that are applicable for your current occupation or role or if you are a trainee and you have incurred costs as part of the education component of your traineeship.
Unfortunately, costs incurred in gaining a qualification to change jobs aren’t tax deductible.
9. HECS-HELP and FEE-HELP repayment
Have you made sure you have ticked the correct box on your employee tax file number declaration form if you have a HECS-HELP or FEE-HELP loan? If you haven’t, you could be in for a nasty surprise!
Don’t get caught out. Also note that rental losses and other negative gearing have no impact on reducing your taxable income for the HECS-HELP repayment calculation.
10. Cost of managing your tax affairs
Any costs you incur during the financial year in the preparation of your tax return and seeking tax advice can be claimed as a deduction. We will automatically claim our invoices on your behalf when we prepare your return. You can claim your mileage incurred in coming to visit us as well.