There are a variety of typical tax deductions in Australia. 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 general rule when it comes to general tax deductions is that the expense must not be a private, domestic or capital expense.
If the expense was both work-related and private or domestic, you are only allowed to claim a tax deduction for the work-related portion.
To ensure that you make the most of all the tax saving benefits available to you, Online Tax Australia has compiled the comprehensive general tax deduction guide below. We also have a variety of occupation-specific tax deduction guides available.
Typical Tax Deductions Australia: Self-Education Expenses
You may be able to claim the costs of self-education if one of the following describes your situation:
- At the time the expense was incurred there was a direct connection between the self-education and your current work/income generating activities.
- You can show that the study leads to, or may lead to, an increase in income from your current employment or work activities.
- Any other direct connection can be found between the self-education and current work activities.
You cannot claim self-education expenses if:
- The study was undertaken to obtain a new job, to open up a new business or to facilitate new income earning activities. For example, a receptionist studying to become a vet cannot claim self-education expenses as the qualification is not required for her current role; it is creating a new income earning activity.
If you are eligible to claim self-education expenses, these include:
- Student union and course fees
- Text books, stationery, photocopying
- Home office expenses, software, printer cartridges, and internet access
- Interest on loans used to purchase computers or to pay fees
- Depreciation on major equipment, like computers
- Secretarial expenses, like typing of assignments
- Travel and accommodation if required to be away from home overnight.
You cannot claim the following self-education expenses:
- Occupancy expenses like mortgage interest, rent, house insurance, and council rates
- HECS-HELP payments
- Financial Supplement Loan Repayments
- Open Learning Agency of Australia basic charges
Typical Tax Deductions Australia: Meals and Travel
- You 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 for work purposes (including any parking, tolls, taxis and public transport), if you are travelling to or from 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 meetings, client visits, conferences or training not held at your usual place of work. If you do plan on claiming travel costs associated with your personal vehicle, then you should keep a diary of the number of kilometres you have travelled and review the various motor claim methods available.
For more information on tax rebates for vehicles, visit: Vehicle Tax Deductions
Typical Tax Deductions Australia: Uniforms and Protective Clothing
The cost of purchasing and maintaining eligible uniforms or protective clothing can be claimed as a deduction.
Eligible clothing expenditure includes:-
- Clothing that you are required to wear that includes your employer’s logo.
- The cost of a compulsory uniform that identifies you as an employee of an organisation such as the Police Force, Ambulance officer, Defence force members etc
- Occupation specific uniforms, eg nurses uniform, ambulance workers uniform and non slip shoes,
- Protective clothing and footwear that protect you from injury, illness or prevent damage to your ordinary clothing. Items include safety glasses, hard hats, steel capped footwear, high visibility clothing and vests, gloves, overalls, protective coats and heavy duty shirts.
- 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 eligible 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
Typical Tax Deductions Australia: 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 only the business-related portion.
- Typical equipment and tools eligible for a tax deduction include:
- Electronic equipment such as computers, mobile phones, Ipads
- Power tools, ladders, toolkits eg spanner/socket sets etc
- Storage cabinets, printers, brief cases
Typical Tax Deductions Australia: Home Office Expenses
If you perform some of your work from your home office, you may be able to claim a deduction for the costs you incur, including:
- The Australian Taxation Office allows a deduction of $0.34 per hour to cover the expenses of heating, cooling, lighting and depreciation of general office furniture such as chair and desk.
- Expenses such as stationery, telephone, internet, and computers can be claimed separately.
- Occupancy expenses such as rent, mortgage interest, council rates and house insurance premiums are not deductible unless your home office is considered to be a place of business. If your only income is paid to you as an employee, you are generally not able to claim a percentage of occupancy costs..
For more information, visit Home Office Expenses
Typical 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
- Telephone and internet fees (for the work related portion only)
- Tax agent fees
- Donations to registered charities
- Income Protection Insurance (if it is not part of a superannuation fund or salary sacrifice arrangement)
For further information, please visit Typical Tax Deductions.
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