Every year thousands of people miss out on tax deductions that they are eligible to claim?
Are you one of them?
Quite often these missed tax deductions are simply forgotten but in many cases people just aren’t aware that an expense can be claimed.Tax deduction
We asked our accountants what the most commonly missed tax deductions are and they came up with the following list.
Do any of these tax deductions apply to you? If so it’s time to make amends and make sure you claim every cent you’re entitled to.
1. Last year’s tax agent fees
If you used YOUtax or any other tax agent, to prepare and lodge your tax return last year, the fee you paid is eligible for a tax deduction. You can claim last year’s fees on this year’s tax return. The fees you pay to a tax agent are always tax deductible but it’s quite surprising how many of us forget this.
2. Licenses, certificates and membership fees
Are you a member of a union or a professional body directly related to your job? Do you need a license or a certificate to do what you do? Don’t forget, you can claim the cost of these fees every year.
3. Conferences, seminars and training courses
Do you attend conferences, seminars or training courses that maintain or increase your knowledge in your current field of work? The expenses related to these fees are usually tax deductible so it’s well worth giving your career a boost with some personal development each year.
4. Work related Car Expenses
With the exception of driving to and from work*, if you use your personal car for ANY work-related travel, you can usually claim fuel and maintenance expenses as a tax deduction for that use. So remember, when you drive between work locations, deliver merchandise pick up or deliver an order for your boss, or attend a meeting away from your usual place of work, make sure you record ALL your mileage.
It’s worth noting that as of 2016, the ‘12 per cent of original value’ and ‘one-third of actual expenses’ methods of claiming have been dropped.
To record your work related care usage you now use either:
The 12 week logbook method (which generates numbers you can re-use for 5 years!)
The cents per kilometre method.
The cent per kilometre method has changed in 2016. This used to increase with the engine size of your car, now it’s a flat rate of 66 cents per kilometre.
*You may be able to claim trips to and from work IF you carry heavy equipment for work, or transport heavy tools required to do your job. Check with your tax agent to see whether your load makes you eligible.
5. Working from home expenses
Do you work from home occasionally? Perhaps you need to finish reports or meet tight deadlines in the evenings. Maybe you work from home one or two days a week, or a few hours a day, to fit in with school hours or child care.
If so, the cost of using your personal computer may be claimed as a tax deduction. The ATO also allows employees who occasionally work from home to claim the running expenses for a part of the home used as a home office.
If you run a home based business or work at home full time as a home based employee you can also claim the apportioned ”occupancy costs” of your home office space as a tax deduction.
Are research, emailing, social media or other online tasks included in the work you do at home?
If your internet connection is in your name, then it’s likely you could claim a percentage of your Internet expenses as a deduction.
For example: Let’s say your internet bill is $60 a month. If 40% of your internet usage is work related you can claim 40% of your monthly bill.
40% of $60 = $24 per month
$24 x 12 = $288 per year
Please note: If your internet costs are shared with another person, you can only claim on the percentage that you are responsible for, as follows:
Total internet cost: $60
Shared with one other = $30 each
40% of $30 = $12 per month
$12 x 12 = $144 per year
6. Mobile Phone Expenses
Do you need to make work related phone calls on your personal mobile phone? If so you can generally claim the cost of these calls as a deduction on your tax return.
It’s important to remember, you are only allowed to claim the cost of your work related phone calls, not your entire phone bill. It’s recommended that you keep a record of all the work related calls you make so you are able to work out the average percentage of your calls that are work-related.
For example: If you pay $49 per month for your mobile phone plan and estimate that 50% of your monthly calls are work related:
50% of $49 = $24.50 per month
$24.50 x 12 = $294 per year
You could claim a $294 tax deduction on your annual tax return for your mobile phone expenses.
Keep good records of mileage, phone calls or internet usage so you are able to provide these to your tax agent.
Our most important piece of advice is: If you’re not sure whether or not you can claim a deduction for a purchase – KEEP THE RECEIPT! Our accountants will be happy to let you know. Remember, it’s always better to have too many receipts than not enough.
Not everyone will be eligible for all the above mentioned tax deductions as these can be governed by certain circumstances and whether or not allowances are paid by employers. Your tax agent will be able to advise which tax deductions are relevant to you.
Book an appointment with a YOUtax Accountant today. Alternatively upload your documentation for processing through our secure Client Portal.