Deductions you can claim

Tax time is now well and truly underway and one of the questions that we often get is “what exactly can I claim?” We all know that we are entitled to claim deductions for some expenses which are mainly related to earning our income, but here are some things that you need to know when it comes to claiming a deduction.

To claim a deduction:

  • you must have spent the money yourself and were not reimbursed for it
  • it must be directly related to earning your income
  • you must have a record to prove it

If the expense was for both work and private purposes, you can only claim a deduction for the work-related portion.
Some of the common deductions include:

  • Vehicle and travel expenses

You can claim vehicle and travel expenses directly connected with your work, but generally, you can’t claim for normal trips between home and work. You need to keep records of your travel expenses.

  • Clothing, laundry and dry-cleaning expenses

You can claim a deduction for the cost of buying and cleaning occupation-specific clothing, protective clothing, and unique, distinctive uniforms. You may need to have written evidence that you purchased the clothing, as well as the cleaning costs.

If you received an allowance from your employer for clothing, uniforms, laundry or dry-cleaning this needs to be included in your tax return.

  • Gifts and donations

You can only claim a tax deduction for gifts or donations to organisations that have the status of deductible gift recipients (DGRs).

  • Home office expenses

You may be entitled to claim deductions for home expenses including a computer, phone or other electronic devices you are required to use for work purposes, as well as a deduction for running costs.

  • Interest, dividend and other investment income deductions

You can claim a deduction for expenses incurred in earning interest, dividend or other investment income

  • Self-education expenses

You may be able to claim a deduction for self-education expenses if your study is work-related or if you receive a taxable bonded scholarship.

  • Tools, equipment and other assets

If you buy tools, equipment or other assets to help earn your income, you can claim a deduction for some or all of the cost. If the tools are used for both work and private purposes the claim with a need to be apportioned.

If you are unsure of the legitimacy of a claim, it’s always in your best interest to get advice from your tax adviser.

If you would like to make an appointment to get your 2016/17 tax return completed, give us a call on 03 6231 3448.