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Easy-to-miss deductions that could reduce your tax this year
By John Collett
With the end of the financial year approaching, it is a good time to start gathering receipts to make sure you claim every dollar to which you are entitled in your income tax return.
While some deductions are well-known, there are some, mostly work-related deductions, that can be easily overlooked, says Mark Chapman, director of tax communications at H&R Block.
You should make sure to claim every cent to which you are entitled in your tax return.Credit: Jim Rice
Bag a deduction
There is still time before June 30 to buy a handbag, briefcase, satchel or backpack which, if they are used for work to carry your laptop and work papers, should be claimable as work expense deductions in your 2023-24 tax return, Chapman says.
Sunscreen, sunglasses and hats can be claimed if you are required to work outside, such as a builder or gardener, including teachers on playground duty and sports training.
You can claim deductions for the purchase and laundering of occupation-specific or protective clothing or distinctive uniforms and for protective boots and protective glasses, and hard hats and helmets, gloves and so on.
Professional subscriptions can be claimed. These are where you are a member of a professional or trade association as part of your work, and also includes union fees as well as subscriptions to trade or professional magazines.
Car claims
The rate for claims on car travel that is for work has increased to 85¢ per kilometre from 78¢ last financial year. Alternatively, you can claim actual expenses provided you keep a logbook for 12 weeks and substantiation, such as receipts or invoices, for the expenses, such as fuel, oil, servicing and insurance.
Those with a fully electric car can claim 4.2¢ per kilometre, and reflects the cost of electricity used from home to recharge the vehicle. That is likely to affect quite a few taxpayers this year with the increase in EV sales.
For electric cars, Chapman says you would need to maintain a logbook to claim other running expenses, such as insurance, for example.
Electric cars, such as Teslas, have become more popular in the last 12 months, meaning many may be eligible for new tax deductions.Credit: Oscar Colman
With self-education expenses, the disallowance of the first $250 has been stopped, so that this year the whole expense can be claimed. Self-education expenses must relate directly to your work as an employee. You cannot claim HECS-HELP payments or repayments.
One of the largest work-related claims that most people are likely to make is claims for working- from-home expenses.
Working from home
Taxpayers can use the flat rate method where 67¢ for each hour worked from home can be claimed, and there is no need to have a dedicated home office. In other words, you can do your work from the couch or balcony.
You must keep a complete record of all the hours they work from home for the period to June 30, 2024, which could be in the form of timesheets, rosters or a diary.
You will need a copy of at least one bill for each type of working-from-home expense, such as electricity, internet, phone, stationery and computer consumables.
That will show that you paid the bills and not your parents, in which case working-from-home expenses cannot be claimed, Chapman says.
Taxpayers are free to use the actual cost method - that may be advantageous for those who can claim particularly high working-from-home expenses, Chapman says.
Other things that can be claimed as a deduction in addition to work-related expenses, include charitable donations over $2, provided you have a receipt showing it was paid to a deductible gift recipient.
- Advice given in this article is general in nature and not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
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