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With tax time nearly upon us, you might be interested in the following deduction tips, which may help increase the amount of money you get back.

Lots of things can affect your tax return, including sources of income from work, investments and government assistance, including any Jobseeker payments you may have received during the financial year.

Other factors that can play a part, include whether you have work-related expenses, such as from travel, equipment, clothing or what you might’ve forked out if you’ve been working from home.

Here’s a quick rundown of things you could consider when preparing, lodging and hopefully maximizing your tax return for the financial year ending 30 June 2024.

What tax deductions could you claim when you lodge your tax return?

Most tax deductions will be work related. However, a work-related expense will only be deductible if you weren’t reimbursed by your employer, it directly relates to you earning an income, and you have a record, such as a receipt (unless the amount you’re claiming is $300 or less, in some instances).

In general, to identify expenses that may be acceptable as tax deductions, you should consider:

  • Was the expense directly related to your work or income-generating activity?
  • Did you spend the money, and you weren’t reimbursed by your employer?
  • Do you have an official record of the expense – e.g. receipt or bank statement?

If the expense was for both work and personal use (e.g. home internet), you need to determine the portion of the expense related to your work or income-generating activity.

Work-related tax deductions may include:

1.    Home office expenses

If you are employed  but work from home, either occasionally or all the time, you are entitled to deductions for costs arising from working at home. The expenses that you can claim include:

  • Heating, cooling and lighting
  • Cleaning costs
  • Decline in value (depreciation) of home office furniture and fittings, office equipment and computers (for items over $300)
  • Computer consumables, stationery, telephone and internet costs 
  • Items of capital equipment (such as furniture, computers and associated hardware and software) which cost less than $300 can be written off in full immediately

With many retailers running End of Financial Year specials, any purchases you make now can be deducted in this year's tax return so from a cash flow point of view, you can minimize the time between purchase and tax deduction!

Alternatively, you can claim the ATO’s concessional 67 cents per hour fixed rate to include several working from home deductions in one simple, easy-to-use amount. The rate includes the additional running expenses you incur for:

  • home and mobile internet or data expenses
  • mobile and home phone usage expenses
  • electricity and gas (energy expenses) for heating, cooling and lighting
  • stationery and computer consumables, such as printer ink and paper.

To use the fixed rate, you must have kept a record of all your working from home hours for the entire year (e.g., a diary, timesheets or rosters) and you must have one item of substantiation for each item claimed (e.g.,  a heating bill). 

The fixed rate does not include deductions for the work-related use of technology and office furniture such as chairs, desks, computers, bookshelves or repairs to these items. Cleaning costs are also excluded. These costs can be claimed separately, so remember to keep those receipts.

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2. Vehicle and travel expenses

While you generally can’t claim expenses for getting to and from your regular workplace, there are some work-related vehicle and travel expenses you may be able to claim. These include:

  • Where your work requires you to attend multiple workplaces or locations
  • Car expenses where you need your car to perform your work duties
  • Accommodation expenses when you’re required to travel for work

3. Education

You may be able to claim a deduction for specific expenses related to your self-education or study, if the education is relevant to earning your income. Self-education and study expenses are the costs you incur to take a study course at a school, college, university or other recognized place of education.

If you work while you study and incur self-education expenses, you may be eligible to claim a deduction. You may also be eligible if you receive a taxable scholarship.

4. Clothing, laundry and dry-cleaning

If you bought occupation-specific clothing, protective clothing or work uniforms specifically related to your job, you may be able to claim these costs, as well as related cleaning costs, as work-related expenses. However, you’re unlikely to be able to claim costs for conventional clothing or non-compulsory work uniforms.

To claim these costs as tax deductions, you need to have written evidence of these costs, such as diary entries and receipts

5. Industry-related deductions

You may also claim tax deductions for work-related expenses specifically related to your occupation and industry.

For better understanding on occupation related expenses 

6. Other work-related expenses

There are other work-related expenses you may be able to claim as tax-deductible expenses, depending on your work and individual circumstances. Expenses to consider include:

  • Books, periodicals and digital information subscriptions
  • Safety goggles and protective sunglasses
  • Overtime meals
  • Union fees, subscriptions to associations and tax agent fees

7. Gifts and donations

If you gave a gift or donation to an organization (e.g. your favorite charity), you may be able to claim a tax deduction. However, there are specific rules that apply.  Generally, you can claim any donation you made above $2 if it was to a registered charity. For gifts, different rules apply depending on the type of gift.

8. Investment income

You may be able to claim investment income tax deductions if you’ve received:

  • Interest payments on your savings
  • Dividends from your investments in shares
  • Rental payments from an investment property
  • Another type of investment income

If you’ve received any of these, you could be entitled to claim for costs related to this income, such as interest charged on money borrowed to buy stocks or rental properties.

You may also be able to claim money you paid for investment advice.

9. Personal Super Contribution

If you have some spare cash, look at making a personal contribution into your super fund. Provided the total amount of your contributions (including the contributions made on your behalf by your employer) does not exceed $27,500, this can be a great way to boost your retirement savings and claim a tax deduction for personal contribution. The payment must be made by June 30th and you need to advise your super fund that you’ve made the payment by the time you lodge your tax return.

10. Prepay Some Expense

You can claim a tax deduction this year for expenses which wholly or partly relate to next year. So, if you have some spare cash, consider paying things like union fees, professional subscriptions and annual insurance premiums in advance in order to accelerate the deduction.

11. Offset Capital Gains against Capital Losses

If you’ve disposed of shares or any other form of investment and you know you’ve made a capital gain, take a look at your investment portfolio and consider disposing of any assets which you know are sitting at a loss. The resulting capital losses can be offset against the capital gain. 

Be careful though if you sell shares sitting at a loss and then buy them back in the new tax year. The ATO takes a hard line against so-called “wash sales”. This refers to the sale of an asset before the year end and the purchase of a substantially identical asset immediately after the year end. The ATO regard the purchase and the sale as effectively the same asset and have issued a Tax Ruling which states that they can apply the anti-avoidance provisions to cancel any tax benefits and apply penalties.

Contact North Coast Accounting Today!

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