When filing your tax return in Australia for the year 2023, there are several deductions you may be able to claim to reduce your taxable income. These deductions fall into various categories, including work-related expenses, investment-related deductions, and personal deductions. Here’s a general overview:
Work-Related Expenses
These are the most common deductions and can include costs like car expenses for work purposes (excluding travel to and from work), travel costs, clothing expenses (specifically for work uniforms or protective gear), education expenses related to your job, union fees, home office costs (including a portion of your internet and phone expenses), and tools or equipment needed for work. Remember, to claim these, the expense must be directly related to your job, and you can’t have been reimbursed by your employer.
Investment-Related Deductions
If you have investments, you may be able to claim deductions related to earning investment income. This includes interest and dividend deductions.
Charitable Donations
Donations to registered charities are often tax-deductible, provided you have a receipt.
Cost of Managing Tax Affairs
Expenses incurred for managing your tax affairs, including fees paid to accountants or tax agents, can be claimed.
Self-Education Expenses
If you’ve undertaken education or training courses that directly relate to your current job, these costs might be deductible. This includes not only the course fees but also associated costs like textbooks, stationery, travel, and internet usage.
Other Deductions
These can include home office expenses (subject to specific conditions), union fees, and professional subscriptions. If you’re working from home, you can claim a deduction for the work-related portion of your home office expenses.
Industry-Specific Deductions
Depending on your occupation, there may be specific deductions you can claim. The Australian Taxation Office (ATO) provides guidelines on industry-specific deductions.
Fuel Tax Credits
If you use fuel in your business operations, you might be eligible for fuel tax credits.
Prepaid Expenses
If you’ve paid for services in advance (costing $1,000 or more), like a subscription to a professional journal, and the service extends beyond the tax year, you can claim a portion of that expense.
Remember, to claim any deduction, you must have spent the money yourself and not have been reimbursed. The expense should be directly related to earning your income, and you need to keep records to prove it. The ATO sets the threshold for needing written evidence for claims at $300, meaning for claims under this amount, detailed records are not required, but you must be able to show how you worked out your claims.
For more specific information about tax deductions and how they apply to your circumstances, reach out to the team.
