Individual Tax Deduction Checklist

    Individual Tax Deduction Checklist

    Here's a list of tax deductions to help you maximise your annual tax refund.


    Did you use your own vehicle for work-related travel during the year?

    There are two methods available for claiming work-related car expense deductions:

    1. Cents per kilometre method: You can claim a deduction of 85 cents per kilometre travelled for work, up to a maximum of 5,000 kilometres per financial year. When using this method, you cannot make an additional claim for car expenses such as fuel or maintenance. (2023 Year - 78c/km,  2022 Year - 72c/km)
    2. Logbook method: This method involves keeping a logbook to record each trip for a consecutive 12-week period to identify the work use percentage. Generally a logbook will be valid for a period of 5 years unless there are significant changes to the vehicle usage. You can claim the work use percentage of all car expenses including fuel, registration, insurance, interest, depreciation, repairs and maintenance. You also need to keep a record of the opening and closing odometer reading each year. 


    Note: The ATO considers travel between home and work to be a private expense and not deductible.

    Did you travel for work during the year?

    Costs incurred for work travel including customer and supplier visits and travel to work-related training events are deductible, including:

    • airfares
    • bus fares
    • taxi fares
    • toll fees
    • accommodation
    • meals
    • incidentals


    Note: Where travel costs include a private component, your claim will need to be apportioned between work-related and private use.

    Did you incur expenses for compulsory work uniforms or protective clothing during the year?


    You can claim the cost of purchasing the following work clothing and protective items:


    • compulsory work uniform with a logo
    • protective clothing including hi-viz workwear, safety vests, and fire resistant clothing
    • overalls, boiler suits, aprons and smocks worn over your regular clothing
    • wet-weather gear for working out doors
    • gloves, ear muffs, hard hats, face masks, safety glasses
    • steel-capped boots, rubber boots for concreters and non-slip shoes for nurses


    Note: The ATO considers conventional clothing such as corporate clothing without a logo, jeans, drill trousers and shirts, regular shoes, socks and stockings to be non-deductible.


    Did you incur laundry expenses for compulsory or protective work uniforms?


    You can claim a deduction for costs you incur to wash, dry and iron compulsory or protective work uniforms.

    You can claim up to $150 without receipts, however you need to be able to show how you calculated your claim.

    The ATO considers a reasonable basis to calculate the amount would be $1 per load for work-related clothing, or 50 cents per load if other laundry items were included.


    Did you incur any self-education expenses in relation to your current employment?


    • You must be currently employed at the time of study and the field of study must be directly connected to your current employment. You cannot claim a deduction for self-education expenses which are intended to enable you to obtain employment in a new or different field.
    • Expenses can include: course fees, text books, stationery, photocopying, internet, travel, seminars, depreciation (e.g. laptop)


    Did you work from a home office?


    • Fixed Rate Method: From 1 July 2023 you can claim 67 cents for each hour you worked from home. This rate includes the cost of electricity, gas, telephone, internet, stationery and computer expenses. If using the Fixed Rate method, no additional claim can be made for these expenses. Additional claims can be made for repairs and depreciation on office furniture and equipment.
    • To claim a deduction using this method, you must:
    • Keep a record of the number of actual hours you worked from home during the entire income year, e.g. a timesheet, roster, diary or other similar document. An estimate of your hours will no longer be acceptable.
    • Keep at least one record for each of the additional running expenses you incur that the rate per work hour includes, e.g. if you incurred electricity and stationery expenses keep one quarterly bill for your electricity expenses and one receipt for your stationery expenses.


    Note: You no longer need a dedicated home office to claim a deduction under the Fixed Rate method.


    • Actual Cost Method: The actual cost method allows individuals to claim the actual running costs of their separate home office. To use the actual cost method you must incur additional running expenses as a result of working from home, and keep records of your expenses and evidence of how you have calculated the deductible portion. Expenses can include electricity, gas, telephone, internet, stationery, computer consumables, cleaning, and depreciation.


    The ATO has an online home office expenses calculator to help you calculate your expenses correctly.


    Note:

    • You will not incur additional running expenses if other members of your household (who are not working from home) are in the same room as you while you are working from home.
    • Occupancy expenses such as rent, mortgage interest, property insurance, rates and land tax can generally not be claimed as a deduction. If you elect to claim occupancy expenses, this may result in you having to pay Capital Gains Tax on a portion of the sale of your main residence.


    Did you incur any other work related expenses? 


    Other work related expenses may include:

    • desktop or laptop computer costs such as depreciation, software, internet security
    • briefcases, laptop bags and sleeves
    • computer peripherals such as power supplies, monitor, keyboard, mouse, computer cables, web cams, speakers, headsets
    • home telephone, mobile phone, phone cases, screen protectors, wall chargers, travel chargers, phone holders
    • home internet, SIM only plans used for work
    • equipment and tools of trade used by plumbers, electricians, carpenters, construction workers and draftspersons
    • repairs and maintenance to work-related equipment and tools of trade
    • high-risk licenses, such as forklift, construction and crane licenses
    • subscriptions, journals, publications and trade magazines
    • union fees
    • income protection and accident insurance premiums
    • work-related seminars and courses


    Note: You can only claim the work-related use percentage of these expenses.


    Sunglasses, sun hats and sunscreen
    Expenditure on sun protection products such as sunglasses, sun hats and sunscreen are deductible for individuals who are required to work outdoors and be exposed to sunlight in the course of their employment.

    Examples may include individuals engaged in farming, construction, teaching, gardening, landscaping, courier services, and other outdoor activities. 


    Deductions for small items costing less than $10 each


    The ATO allows you to claim up to $200 worth of small items costing less than $10 each without a receipt providing you keep a record of these expenses.

    Expenses may include:


    • USB's
    • printer paper
    • printer cartridges
    • batteries
    • pens
    • pencil cases
    • rulers
    • highlighters
    • computer mouse
    • folders
    • note pads
    • plastic sleeves
    • DVD's
    • diaries and diary refills
    • hole punch
    • stapler
    • small tools
    • calculator


    Occupation-specific deductions


    • For occupation specific claims, search online for 'occupation specific deductions ATO'.


    Did you make any donations?

    Donations of $2 or more to a registered charity are tax deductible. To confirm whether an organisation is a deductible gift recipient (DGR), search for the name or ABN of the charity on www.abr.business.gov.au and scroll down to the Charity tax concession status section.


    • Popular charities include Australian Red Cross, World Vision Australia, The Salvation Army, Beyond Blue, Cancer Council Australia, Royal Flying Doctor Service, MS Australia, Rapid Relief Team.
    • Australian school building funds are generally eligible to receive deductible gifts. If unsure, check with the fund administrator.


    Note: Where something is received in exchange for the donation such as a raffle ticket or toy, the donation is not deductible.


    Did you incur any costs in relation to managing your tax affairs?


    • Tax agent and accounting fees
    • Tax planning fees
    • Travel to your tax agent or accountant is deductible, including inter-state travel where applicable
    • ATO audit costs


    Did you make any personal superannuation contributions?


    Individuals can claim a deduction for making concessional (tax-deductible) contributions into superannuation. The concessional contributions cap is $27,500 which includes any superannuation contributions made by your employer. Contributions to super are taxed at 15% and may not be tax effective for individuals earning less than $22,000 per year.


    If your superannuation balance is less than $500,000 and your concessional contributions were less than the cap in previous years, the unused concessional contributions for each year from 2019 onwards can be brought forward (for up to 5 years) and used in a later year.

    If you are 67 to 74 years old, you will be required to meet the work test in order to claim a personal superannuation contribution deduction. To meet the work test, you must be gainfully employed for at least 40 hours during a consecutive 30-day period in the financial year in which the contributions are made.



    TAX PLANNING TIPS


    Salary Sacrifice

    Salary sacrificing is where you agree to forgo part of your salary or wages in return for a benefit of a similar value, such as additional super contributions, a car, laptop, tablet, mobile phone or trade tools.

    Where the benefit is an exempt benefit, such as portable electronic devices, computer software, protective clothing or tools of trade, your employer will not have to pay fringe benefits tax, and you will effectively be paying for these benefits using pre-tax income.

    If you are earning over $45,000 a year, salary sacrificing an electronic device or tool of trade at a cost of $1,000 will save you $345 in tax compared to purchasing the item privately and not claiming it as a deduction.


    Maximising Tax Thresholds

    Income tax thresholds for Australian residents for the 2024-25 financial year are as follows:

    Up to  $18,200     0%

    Over   $18,200     16% + 2% Medicare levy

    Over   $45,000     30% + 2% Medicare levy

    Over $135,000     37% + 2% Medicare levy

    Over $190,000     45% + 2% Medicare levy


    When your income is getting close to the next threshold, consider ways to defer or bring forward any income to maximise your tax rate in a particular year. This could include discussing the timing of bonus payments with your employer, or taking advantage of salary sacrifice options.


    Private Health Insurance & Medicare Levy Surcharge

    Medicare Levy Surcharge is payable by individuals or families who do not have an appropriate level of private patient hospital cover, and their income is above the threshold.

    The base threshold for singles is currently $90,000 and for families $180,000. The Medicare Levy Surcharge is either 1%, 1.25% or 1.5% depending on your income level.

    Where you or your family’s income is approaching the thresholds, we recommend investigating your private health insurance options.


    Lifetime Health Cover Loading

    Lifetime Health Cover is an Australian government initiative designed to encourage Australian residents to get hospital cover early and keep it up. If you have not taken out and maintained private patient hospital cover from 1 July after your 31st birthday, you will pay a 2% LHC loading on top of your premium for every year you are aged over 30, with a maximum loading of 70%.

    Any loading will be removed after you have held hospital cover continuously for 10 years, however it may be reapplied if you then cease to hold hospital cover and subsequently take it up again.

    If you are approaching the age of 30 we recommend you set a calendar reminder to consider private health insurance before you or your spouse turns 31, whichever is older.


    Division 293 Tax

    Division 293 tax is an additional tax on super contributions, which reduces the tax concession for individuals whose combined income and contributions are greater than the Division 293 threshold, currently $250,000.

    Negatively geared investments such as property or shares, and reportable fringe benefits amounts are added back on to your income for Division 293 Tax purposes.

    Where a couples combined income will exceed $500,000 in an income year, consider capping one members income at $250,000 with the balance flowing to the spouse. This will mean that only one spouse will be liable to pay Div 293 tax instead of both individuals.


    We trust you found this checklist helpful. If you need any help to take advantage of any of these deductions, please don't hesitate to contact our friendly team on 07 4635 4616.


    Disclaimer

    We believe this information to be correct at the time of publication. It is general in nature, does not take into account your personal financial situation, and does not constitute formal advice. You should always seek advice from your accountant or financial planner before making any decisions in relation to any of the content provided.


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