When completing your tax return, you’re entitled to claim deductions for some expenses that are directly related to earning your income. You subtract these allowable deductions from your total income to arrive at your taxable income. You only pay tax on your taxable income.

The expense must not be a private, domestic or capital expense. If the expense was both work-related and private or domestic, you can only claim a deduction for the work-related portion.

Basic rules for claiming deductions

The most basic rules when you claim a deduction are:

Claim the deduction in the same income year that you made the purchase.

Don’t claim an expense that you have been, or will be, reimbursed for.

Claim for expenses in earning your assessable (taxable) income but not private, domestic or capital expenses.

Keep written records that are legible and in English.

Vehicle and travel expenses

You can claim vehicle and other travel expenses directly connected with your work but you can’t claim for normal trips between home and work, which are considered private travel.

Clothing, laundry and dry-cleaning expenses

You can claim a deduction for the expense of buying and cleaning clothing that is specific to your occupation, special work clothing and footwear that you wear to protect yourself from the risk of illness or injury; and your work uniform, if it meets certain conditions. You can’t claim for everyday clothes, even if your employer tells you to wear them.

Gifts and donations

You can claim a tax deduction for a gift if it is a genuine gift of money or property to a deductible gift recipient (DGR). You can’t claim a deduction if you get a benefit, such as raffle tickets and fundraising chocolates.

Home office expenses

If you perform some of your work from a home office, you may be entitled to a deduction for the costs you incur in running it, including for:

home office equipment such as computers, printers and telephones

work-related phone calls (including mobiles) and phone rental

heating, cooling, lighting and cleaning expenses.

Interest, dividend and other investment income deductions

If you earn investment income such as interest or dividends, you can claim deductions for expenses, such as account-keeping fees if you held the account for investment purposes, and management fees and fees for investment advice.

Tools, equipment and other assets

You may be able to claim a deduction for tools and equipment you use for work. The type of deduction you claim depends on the cost of the item. Items that cost $300 or less may be claimed immediately.

Other deductions

You can also claim other expenses, which may be work related, such as

the cost of reference books,

periodicals and digital information,

union or professional association fees.

You may also be able to claim for expenses relating to income or sickness insurance, or to foreign pensions or annuities, or for personal superannuation contributions.

If you are submitting your personal income tax return yourself it must be lodged with the ATO by 31 October each year. However, if your return is prepared and lodged by a registered Tax Agent such as The Quinn Group then the deadline is significantly extended. Our dedicated team of experienced Tax Agents and Tax Accountants are able to assist you with all your tax queries and lodgement of your tax return. Contact us now by submitting an online enquiry form or call 1300 QUINNS or on +61 2 9223 9166 and arrange a meeting today.

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