Basic tax deductions.
What you can deduct for a basic individual tax return.
A deduction effectively lowers ones taxable income. In effect, the total amount of tax saved will be the total amount of the deduction multiplied by ones marginal tax rate.
Basically the more deductions one has to claim, the higher the tax refund (or a lower tax payable).
Basic deductions (this is not an exhaustive list) are as follows:
-Car deductions.
-Travel from home to work is generally not deductible unless one is carrying heavy tools/equipment from home to work.
-Any travel from work to work (ie office to meeting clients) is deductible or work to courses/seminars/conferences/site visits etc.
-Uber and Taxis.
As above, travel from home to work is not deductible, however any travel between places of work (ie work to clients, work to courses etc) is completely deductible.
-Interstate/International travel.
Any travel (whether it be interstate or international) incurred for the primary reason of work (ie the primary reason of the travel is related to gaining assessable income).
Almost all expenses are deductible for travel ie:
-flights
-meals
-accomodation
-coles/woolworths
-magazines
-pub meals and “reasonable” amounts of alcohol with meals etal
Should the travel be not 100% work related, the expenses will need to be apportioned for the work related percentage (ie 60% work related would mean only 60% of expenses are incurred)(your local accountant south yarra will be able to help you with this).
-Uniform/protective clothing.
Any clothing which is considered protective (and required for your particular role) is deductible (ie gloves, hats, boots, non-slip shoes, high vis vests etc.
Industry specific clothing is also deductible (items such as bakers hats, chef pants etc).
Any items of clothing which is branded is also deductible (ie it has your company logo).
The whole premise is any clothing which is not “ordinary” (ie clothing you would be likely to wear in public) is deductible (for any grey areas, please contact your accountant south yarra).
-Union fees/Membership fees/Courses/Conferences/Self development
Any of the above will be deductible as long as the expense specifically relates to your role in gaining assessable income (ie a course can only be deducted if it maintains skill/knowledge or likely to give rise to a promotion in the same field), any course which is likely to give rise to employment in a different field will not be deductible.
-Home office
Should you work from home and have an area “specifically set out for the purpose of working from home,” you can claim a percentage of your running expenses (ie if your home office is 30% the size of your home, you may claim 30% of your gas, electricity and cleaning expenses)(running expenses will not effect capital gains in future).
If you are not subject to PSI rules and are running a business, you may also be eligible to claim a portion of your home rent or mortgage, however we strongly advise NOT to claim any ownerships costs of your own property such as council rates, body corporate or interest as this will effect capital gains upon sale of your property (IE only claim gas, electricity, cleaning and rent (if not subject to PSI or working PAYG).
If you do not have an area set out specifically set out for the purposes of working from home, you will not be able to claim a portion of your gas, electricity and cleaning expenses, however you may still claim home office using the cents per hour method (you will receive 45cents per hour (current 19/09/2017).
Other home office items are deductible by whatever percentage you can justify as being business related ie:
-Mobile phone
-Internet
-New computers/laptops/monitors/computer accessories
-office tables
-chairs
Other items which are deductible as long as they are relevant in your profession include (but are not limited to):
-Tools
-Equipment
-Computer accessories
-Stationery
-Printers/inks
-Software
-Mobile phones
-Ipads
-GPS/Navman
-FOB watch
-Waiters friends
-Magazines
-Reference books
-Self development books
-Subscriptions
-Client gifts
-Work Bags (1 work hand bag is acceptable per year for Lady’s)
-Luggage (for work related travel)
Donations
Also deductible as long as they are to an organisation which is on the deductible gifts recipients register.
Accounting Fees
Deductible as long as the accountant is a registered tax agent.
Travel to your accountant is also deductible, (ie living in Darwin and visiting your local accountant south yarra)
Miscellaneous deductible items
-Personal super contributions
-Income protection insurance (as long as this is paid out of pocket not from your super)
This is not an exhaustive list, for further clarification on any of the above, please see your local accountant south yarra.
