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:
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:
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:
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?
Did you work from a home office?
Note: You no longer need a dedicated home office to claim a deduction under the Fixed Rate method.
The ATO has an online home office expenses calculator to help you calculate your expenses correctly.
Note:
Did you incur any other work related expenses?
Other work related expenses may include:
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:
Occupation-specific deductions
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.
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?
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.