There are a number of military tax deductions available to all members of the Australian Defence Force. We have specialised in preparing tax returns for military personnel for more than 20 years, working closely with clients all across Australia. So, rest assured, no matter how many times you might be relocated, you’ll never need to look for another tax agent again.
To ensure that you are aware of all the military tax deductions available to you, Online Tax Australia has put together the comprehensive list below. There are a number of special rebates to which you are entitled, particularly if you are deployed in remote rural areas or overseas, and in relation to the Medicare rebate.
Military Tax Deductions: Medicare Exemption
- If you are entitled to full medical treatment under the Australian Defence Force program, then you are eligible to receive an exemption from the Medicare levy charge. This exemption applies for the number of days during the year for which you were covered by the Australian Defence Force program.
- If you are an Australian Defence Force Reserves members, you can receive an exemption for the number of days for which you were in continuous full-time service.
- A full exemption is available if you:
- Have no dependants OR if all of your dependants also fall under an exemption category
- Have a dependant spouse (and or children) who earns a level of taxable income that requires them to pay Medicare.
- Have dependent children who do not pay Medicare, and a spouse who is also in an exemption category. In this case, either yourself or your spouse must elect to receive half Medicare exemption.
- In cases where the above conditions are not met, you are entitled to a half Medicare exemption for the days of the year during which you qualify.
Military Tax Deductions: Zone Rebate
- If you reside for more than 183 days in a specifically identified remote area of Australia, you may be eligible to receive a tax benefit known as a Zone Offset. This benefit may also apply if the aggregate time you’ve spent in a remote area exceeds 183 days during a two-year period.
- There are three zones that may attract an offset benefit:
- Zone A: Includes specific locations such as Norfolk, Macquarie, Cocos, Christmas, Lord Howe, Heard and McDonald Islands (does not include offshore oil platforms).
- Zone B: Includes islands that are adjacent to the coastline of the mainland and Tasmania.
- Special Zone: – includes areas that are more than 250km from the nearest town centre, with a population of less than 2,500.
- Visit the Australian Taxation Office website to determine whether your specific location is eligible for a Zone Offset
Military Tax Deductions: Overseas Forces Tax Offset
- A special Overseas Forces Tax Offset is available to members of the Australian Defence Force if:
- You served in a specified overseas locality as a member of the Australian Defence Force or the United Nations armed force.
- Your income for that service was not specifically exempt from tax.
- There is no minimal length of time required to ensure that you are entitled to this tax offset. The offset will however be apportioned for time periods less than 183 days.
- Current specified localities included under the Overseas Forces tax offset include:
- The Sinai
- The area comprising the political boundaries and airspace of the Federal Republic of Yugoslavia (including the province of Kosovo), Albania and the former Yugoslav Republic of Macedonia
- Total land area, territorial waters and airspace within the internationally recognised boundaries of Israel, Jordan, Syria, Lebanon and Egypt
- Total land areas, territorial waters and airspace boundaries of the Solomon Islands.
- Sudan and its territorial waters and airspace
- Area comprising the land, sea and air areas bounded by the internationally recognised borders of Pakistan
- Area comprising East Timor and its territorial waters and airspace
- Area comprising Lebanon and its territorial waters and airspace
Military Tax Deductions: Uniforms and Protective Clothing
- You can claim the cost of a purchasing and repairing Australian Defence Force or other military uniforms.
- You can claim the cost of protective clothing and footwear that may be required to perform your duties such as:
- Safety hats, glasses and gloves,
- Steel-capped boots
- Heavy duty protective shirts and pants
- Conventional clothing is not tax deductible, even if your employer requires that you wear specific items (such as business suits, specific coloured clothing, certain brands or items that your employer sells).
- You can claim the cost of renting, repairing and cleaning any of the work-related or protective clothing mentioned above, with the following provisions:
- If your tax deduction claim for laundry is under $150, no written documentation is required. The Australian Taxation Office calculates the cost of laundry at $1 per load of work-related clothing, or 50 cents per load if other laundry items are included.
- If you are claiming dry-cleaning or clothing repairs, you are required to keep receipts.
For more information, visit Uniform Claims
Military Tax Deductions: Meals and Travel
- Defence Force members may claim the cost of meals when working overtime provided you have received a meal allowance from your employer which is based on an Industrial Award. AND that allowance is shown separately on your PAYG certificate. You can claim the actual cost of the meal or up to the Australian Taxation Office allowable limit without retaining receipts. Amounts claimed over that amount will need to be supported with receipts.
- You may claim the cost of travel (including any parking, tolls, taxis and public transport), if you are travelling to or from military bases, attending meetings, seminars, conferences, or training that is not being held at your usual place of work.
- If you are required to stay away from home overnight for the purposes listed above, you may be eligible for a tax claim for the cost of accommodation and any meals consumed.
- You may claim the cost of your personal car if it is used for work purposes, including travel to between and/or around military bases, attend meetings, conferences or training that is not held at your usual place of work, or to visit third party suppliers. If you do plan on claiming the cost of using your personal vehicle, you will need to keep a diary of the number of kilometres travelled.
For more information on tax rebates for vehicles, visit: Vehicle Tax Deductions
Military Tax Deductions: Equipment and Tools
- You can claim a tax deduction for work related equipment and tools that cost less than $300 each.
- Items worth more than $300 each must be depreciated over the useful life. When you enter the item in our depreciation calculator, it will calculate the correct claim for the current year and carry the balance forward to claim in future years.
- If an item is used partly for business, and partly for private purposes, then you are entitled to claim the only the business-related portion.
- Typical equipment and tools eligible for a tax deduction for military personnel include:
- Tools and equipment required to perform your role in the field
- Electronic equipment such as computers and mobile phones
- Backpacks and laptop carry bags etc
Military Tax Deductions: General Expenses
There is also a range of general tax deductions, available to all Australians, regardless of profession or occupation, including:
- Conference and seminar fees
- Reference books
- Subscriptions to professional journals and magazines
- Telephone and internet fees (for the work related portion only)
- Home office costs
- Tax agent fees
- Donations to registered charities
- Income Protection Insurance
For further information, please visit Typical Tax Deductions
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