Tax season can be confusing, and knowing what expenses you can legitimately claim can make a significant difference! Well, when we talk of tax deductions in Australia, we check out various types of expenses you might be eligible to claim, provided they meet specific criteria. So in this blog, we will check out the tax deduction in-depth!

Work-Related Deductions: The Basics

Expenses incurred when performing duties connected to one’s occupation might be deducted from taxable income. You must meet the following requirements to qualify for these reductions:

1. Keep Records: You must maintain records to substantiate your claims.
2. Personal Expense: You should have personally incurred the expense.
3. No Reimbursement: You shouldn’t have been reimbursed for the cost.
4. Job-Related: The expense must be related to your job.

If an expense serves both work and private purposes, you can only claim the portion that relates to your job.

Types Of Deductions You Can Claim

1. Vehicle and Travel Expenses: When using your car for work, you can claim expenses related to its use. However, keeping meticulous records is vital. Regular commuting between home and work is not claimable, even if you perform minor tasks on the way.
2. Work-Related Clothing and Laundry Expenses: Claiming deductions for work clothing can be tricky. To qualify, clothing must be specific to your occupation, protect you from illness or injury related to your job, or be part of your employer’s uniform policy.
3. Working from Home Deductions: If you work from home, you can claim a portion of home office expenses, such as computers and phone bills, as deductions. Keeping records is crucial in this context.
4. Mobile Phone Use: If you use your phone for work purposes, you can claim deductions for related expenses. However, you need to determine the percentage of work used over a typical four-week period in the tax year.
5. Professional Associations, Magazine Subscriptions, and Trade Union Fees: Membership fees for professional associations and trade unions are deductible. Additionally, subscriptions to magazines related to your profession can also be claimed.
6. Gifts and Donations: To claim deductions for gifts or donations, the organisation receiving the contribution must have deductible gift recipient (DGR) status. The amount you can claim depends on the type and value of the gift.
7. Interest and Investments: You can claim deductions for expenses related to earning interest, dividends, or other investment income. Keep in mind that you can only claim your share of fees for joint accounts.
8. Income Protection Insurance: Premiums for income protection insurance can be included in your deductions. However, life insurance, critical care insurance, and trauma insurance are not eligible for deduction.
9. Self-Education Expenses: You can claim self-education expenses if your study is directly linked to your work and leads to skill improvement, income increase, or better job prospects. Eligible expenses include course fees, equipment, and travel.
10. Tools and Equipment: Deductions can be claimed for tools and equipment necessary for work. The type of deduction depends on the cost of the asset.
11. COVID-19 Expenses: During the COVID-19 pandemic, expenses related to PCR tests or other tests registered in the Australian Register of Therapeutic Goods, as well as personal protective equipment (PPE), may be deductible if incurred for work-related purposes.
12. Tax Preparation Fees and Travel: If you enlisted a tax professional for your return or incurred travel expenses to meet with your accountant, you can claim these costs as deductions.

Conclusion

To conclude, what expenses you can claim on your tax return can optimise your financial situation. Keep detailed records, consult a tax professional if needed, and ensure you meet the criteria for each deduction. And if you are looking for a reputable tax accountant in Australia, you can rely on KPG Taxation. Their expert tax accountants help you navigate the tax deduction maze strategically and help you make the most of your financial resources.