With the end of the financial year coming up, it’s important to know what tax deductions you can claim. So in this video I’m going to share 11 tax deductions you might not know about.
But before we get started, remember I’m not a tax advisor and this isn’t tax advice. This video is for informational purposes only, you should consult a registered tax advisor or the Australian Tax Office to see if these tax deductions are applicable to you.
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Disclaimer: I am not a financial adviser, I am not an accountant, I am not a tax adviser. This video and my channel is for general information only, as with anything in life you should do your due diligence and seek independent advice.
1. Home office expenses you can claim include:
- electricity expenses associated with heating, cooling and lighting your home office
- cleaning costs for of your home office
- computer consumables (for example, printer paper and ink) and stationery
- home office equipment, including computers, printers, phones, furniture and furnishings
Internet and phone expenses
Because of the pandemic a lot of people had to work from home and the ATO introduced a shortcut method in response. Using the short cut method, you can claim 80 cents per hour for each hour you work from home.
It’s important to note that the method is temporary and can only be used to work out your deductions between 1 March to 30 June 2020 in the 2019-20 income year and for the 2020-21 income year.
The shortcut method covers all your working from home expenses, which means if you use this method, you can't claim any other expenses for your home office.
There’s also the fixed rate method which lets you claim 52 cents for each hour you work from home. This method doesn't include phone expenses, internet expenses, computer consumables and stationery.
2. Handbag
Second tax deduction you might not know about is a handbag or briefcase or satchels. Like most deductions, there are some conditions around it. So unfortunately you won’t be able to claim a deduction on your new Dior Book Tote bag.
The ATO website says that you may be able to claim a deduction for a handbag, briefcase or satchel if you use it to carry items you need for work, such as laptops, tablets, work papers or diaries. The amount of the deduction will depend on how much you use the bag for work purposes.
Unfortunately you won’t be able to claim a deduction if you mainly use the bag for personal purposes which they give examples like carrying your lunch or beauty products.
3. Phone and internet expenses
Now before you get excited and claim all of your mobile and internet bills, this deduction is for work related purposes only.
Which means if you use your phone for both work and private use, you will need to work out the percentage that is for work.
To work out your mobile phone deduction, you need to pick a typical four-week period in the tax year and calculate how much of your phone usage was work related.
4. Transport and travel expenses
Generally speaking you can’t claim expenses for getting to and from your regular workplace but you can claim transport and travel expenses you incur when you travel in the course of performing your work duties.
5. Face masks, hand sanitizer and anti-bacterial spray
According to the ATO, you might be able to claim on face masks, hand sanitizer and anti-bacterial spray depending on your work
6. Work clothes
If you have a work uniform or occupation-specific clothes, they may be claimable. For example, the chequered pants a chef wears or a uniform if you work in retail.
You can also claim a deduction on protective clothing if it protects you from specific risks of illness or injury from your work duties.
7. Gifts and donations
You can claim a deduction for gifts or donations that are made to organisations which have a ‘deductible gift recipient’ status.
8. Cost of managing tax affairs
You can claim a deduction for expenses you incur in managing your own tax affairs.
9. Books and journals
Another deduction you might now know about is books and journals.
10. Self-education expenses can be deducted if there is a direct connection in the education and your work activities.
11. Personal super contributions