Tax deductions are great opportunities to save money. That’s why it’s so important to keep track of your expenses and make sure you claim what you’re entitled to. Here are some commonly overlooked tax deductions to keep in mind.
With most people working from home in some capacity over the last year, home office expenses should be on your radar. To make it easier for people to claim working from home deductions due to COVID-19, the ATO is allowing you to claim a rate of 80 cents per hour worked for all additional running expenses (including phone and internet) from 1 March 2020 until 30 June 2021.
Income protection premiums are generally tax-deductible in the year they are paid. You should receive a statement after the end of the financial year which will show you what amount you can include in your tax return. From August 2021, you can also login to My Zurich to find your annual tax statement.
When you make charitable donations, or even sponsor a colleague in Movember, you can generally claim those amounts as tax-deductions. Make sure you request a tax receipt if you don’t get one automatically. Just be careful, some types of donations (e.g. crowdfunding donations for individuals or non-charities) may not be tax-deductible, so you may want to check the tax status before you commit.
Doing an online course or evening class that relates to your work? These costs are generally tax-deductible, provided they’re not being reimbursed by an employer. The deduction may include the cost of the course(s), text books and even travel costs. For a full list of what you can claim visit the ATO website.
The fee you pay to get your tax return prepared is tax-deductible. Just remember the fee you incur to prepare this year’s tax return (after 1 July) will generally go into next year’s deductions. So don’t forget to include last year’s tax agent fee in this year’s tax return.
If you pay to receive advice from a financial adviser or stock broker in relation to specific investments that produce assessable income (e.g. shares, investment properties or property trusts), these advice fees are generally tax-deductible.
If you sell shares or other investments for less than you paid for them, you can claim these ‘capital losses’ on your tax return in the financial year you sell them. These losses will offset any capital gains you earned in the same tax year, reducing your tax liability. If you don’t have any capital gains to offset, you can use the loss to offset a capital gain in future years. You cannot deduct capital losses from other income.
If you have a loan for investing in shares or other income-producing investments, you probably know you can claim a tax deduction for the interest on that loan. But did you know you may be able to pre-pay up to 12-months interest and bring forward the tax deduction to this financial year? This option is generally only available on fixed rate margin loans.
If you wear occupation-specific clothing, protective clothing and/or a distinctive uniform to work, you can generally claim a tax deduction for the cost of buying and cleaning these clothes. You can’t claim any costs that are reimbursed by your work.
Some industries offer or require you to join a union or professional body – groups such as the Transport Workers Union, the Australian Primary Health Care Nurses Association and the Institute of Chartered Accountants. If you pay a subscription/member fee to be part of these groups, or you subscribe to industry magazines or journals, you can generally claim those costs as a tax deduction, provided they are not reimbursed by an employer.
You may be able to claim a tax deduction on eligible personal contributions made to your super fund during the financial year, including premiums paid for your insurance cover.
You’ll need to complete the ATO’s Notice of intent to claim a tax deduction form and return it to your super fund administrator, but you’ll need to do this while you are a member of the fund. You’ll also need to receive an acknowledgement from the fund, as the fund will be unable to action your notice after your super fund membership ends.
If you’d like to check the specific rules and eligibility criteria for tax deductions, visit the ATO website or seek advice from your accountant.o difficult to manage the full plan.
You need to keep your written evidence for five years from the date you lodge your tax return, either in paper or digital format. If you make paper or digital copies, they must be a true and clear copy of the original.
