Every year thousands of people miss out on tax deductions that they are eligible to claim. Are you one of them?
Quite often these missed tax deductions are simply forgotten but in many cases people just aren’t aware that an expense can be claimed.
We asked our accountants what the most commonly missed tax deductions are and they came up with the following list.
Do any of these tax deductions apply to you? If so it’s time to make amends and make sure you claim every cent you’re entitled to.
1. Last year’s tax agent fees
If you used Etax Local, or any other tax agent, to prepare and lodge your tax return last year, the fee you paid is eligible for a tax deduction. You can claim last year’s fees on this year’s tax return. The fees you pay to a tax agent are always tax deductible but it’s quite surprising how many of us forget this.
2. Licenses, certificates and membership fees
Are you a member of a union or a professional body directly related to your job? Do you need a license or a certificate to do what you do? Don’t forget, you can claim the cost of these fees every year.
3. Tax Deductions for Conferences, seminars and training courses
Do you attend conferences, seminars or training courses that maintain or increase your knowledge in your current field of work? The expenses related to these fees are usually tax deductible so it’s well worth giving your career a boost with some personal development each year.
4. Income Protection insurance
This is one of the most missed tax deductions in Australia. If you pay for income protection insurance outside of your Superannuation, claim the premium costs on your tax return each year. So many people don’t realise they can claim this expense so often miss out every year.
5. Work related Car Expenses
With the exception of driving to and from work*, if you use your personal car for ANY work-related travel, you can usually claim fuel and maintenance expenses as a tax deduction for that use. So remember, when you drive between work locations, deliver merchandise pick up or deliver an order for your boss, or attend a meeting away from your usual place of work, make sure you record ALL your mileage.
To record your work related care usage you now use either:
- The 12 week logbook method (which generates numbers you can re-use for 5 years!)
- The cents per kilometre method – at a flat rate of 72 cents per kilometre for for 2020-21 (68 cents per litre for the 2018-19 tax year.)
*You may be able to claim trips to and from work IF you carry heavy equipment for work, or transport heavy tools required to do your job. Check with your tax agent to see whether your load makes you eligible.
5. Working from home expenses
Do you work from home occasionally? Perhaps you need to finish reports or meet tight deadlines in the evenings. Maybe you work from home one or two days a week. Perhaps a few hours a day, to fit in with school hours or child care.
If so, the cost of using your personal computer may be claimed as a tax deduction. The ATO also allows employees who occasionally work from home to claim the running expenses for a part of the home used as a home office.
Do you run a home based business or work at home full time as a home based employee? If so you can also claim the apportioned “occupancy costs” of your home office space as a tax deduction.
Are research, emailing, social media or other online tasks included in the work you do at home?
If your internet connection is in your name, then it’s likely you could claim a percentage of your Internet expenses as a deduction.
Let’s say your internet bill is $60 a month. If 40% of your internet usage is work related you can claim 40% of your monthly bill.
- 40% of $60 = $24 per month
- $24 x 12 = $288 per year
Please note: If your internet costs are shared with another person, you can only claim on the percentage that you are responsible for, as follows:
- Total internet cost: $60
- Shared with one other = $30 each
- 40% of $30 = $12 per month
- $12 x 12 = $144 per year
COVID-19 Update: Read our blog on the temporary Short Cut Method for claiming tax deductions between March 1 and June 30 2020
- Keep good records of mileage, phone calls or internet usage> This makes it easier to provide these to your tax agent.
- If you’re not sure whether or not you can claim a deduction for a purchase – KEEP THE RECEIPT! Our accountants will be happy to let you know. Remember, it’s always better to have too many receipts than not enough.
Please Note: Not everyone will be eligible for all the above mentioned tax deductions. These can be governed by certain circumstances and whether or not allowances are paid by employers. Your tax agent will be able to advise which tax deductions are relevant to you.
Call Etax Local today on 1300 174 689 to talk to one of our accountants or fill out our online contact form.
Are you an existing Etax Local client?
Did you know, you can now use our online live chat inside the client portal to talk through any queries you may have in relation to tax deductions or any new jobs we’re working on for you.
Simply log in the client portal and click on the chat bar at the bottom right of the page.