Navigating tax deductions can be a complex process for many taxpayers. As an experienced accountant, I often address common queries about what can be claimed on tax returns. Understanding these deductions can help you maximise your tax return and ensure you are compliant with Australian Taxation Office (ATO) regulations. Here are some frequently asked questions and their answers.
1. Can I claim work-related expenses?
- Answer: Yes, you can claim work-related expenses that directly relate to earning your income. This includes costs like uniforms, tools, work-related travel, and home office expenses. However, these must be expenses not reimbursed by your employer, and you need to have records to prove these expenses.
2. Are home office expenses deductible?
- Answer: Yes, if you work from home, you can claim a portion of your home office running costs. This may include internet charges, electricity for heating or cooling, and depreciation of office equipment. You should keep a diary to document your work from home hours and calculate the running costs.
3. Can I claim my car expenses?
- Answer: Car expenses related to your work can be claimed. However, expenses for travel between home and work are generally not deductible. You can use either the ‘cents per kilometre’ method or the ‘logbook’ method to calculate these deductions.
4. Is it possible to claim mobile phone and internet costs?
- Answer: Yes, if you use your personal mobile phone or internet for work purposes, you can claim a portion of these costs. You need to keep records, like bills or diary entries, to show the work-related portion of these expenses.
5. Can I claim self-education expenses?
- Answer: Self-education expenses related to your current job can be deductible. This includes courses, textbooks, and travel related to the education. The course must have a direct connection to your current employment.
6. Are medical expenses tax-deductible?
- Answer: Most personal medical expenses are not deductible in Australia. However, there are exceptions, such as specific medical expenses relating to disability aids, attendant care, or aged care.
7. Can I claim charitable donations?
- Answer: Yes, donations of $2 or more to registered charities are deductible. You need to keep receipts for these donations.
8. What about investment-related expenses?
- Answer: If you earn income from investments, such as dividends or rental income, you can claim related expenses. This includes investment advisory fees, interest on loans for investment purposes, and maintenance costs for rental properties.
9. Can I claim union fees or professional subscriptions?
- Answer: Yes, union fees and professional subscription costs related to your work are deductible.
10. Are there deductions for personal superannuation contributions?
- Answer: Yes, personal superannuation contributions can be claimed as a tax deduction. However, there are caps on the amount you can contribute each year.
Understanding what you can claim on your tax return can significantly affect the amount you are refunded or owe. It’s important to keep accurate records and receipts throughout the year to substantiate your claims. If you’re uncertain about what deductions apply to your situation, it’s advisable to consult a professional accountant to ensure you’re making the most of your tax return while adhering to ATO regulations.