Summary of Individual Tax Deductions

Individual Tax Deductions

I have provided a bit of info about each of the main types of tax deductions.

Australian tax rules are not simple – which is why a lot of Australians pay a tax agent to do their tax return (and you can claim the tax agent costs under D10 in next years return – ie. the year you paid).

And of course – this is only a VERY Brief summary, so to clarify what you can actually claim, it is probably best to speak to a tax agent or review e-tax and/or the ATO website.

Standard deduction of $500 from 2013

Luckily the government has announced that in the 2013 year you can get a standard deduction of $500 (and $1,000 in the 2014 year) and this might mean you don’t have to lodge a return.

Tax deductions

Some of the most common types of tax deductions claimed would be:

D1 – Car Expenses, D5 – Other Work Expenses, D9 – Gifts and Donations, D10 – Cost of Managing Tax Affairs

Types of tax deductions

Work Expenses – D1 to D5

Gifts – D9

Managing Tax Affairs – D10

Non-work Deductions – D6 to D8

Supplementary Deductions – D11 to D16

 

Work Expenses

D1       Work related car expenses              

If you have used your car to travel to a client (ie. not to work from home)

The easiest way to claim: cents per kilometre

The ATO cents per km rate changes but in the 2009 year a 1.6-2.6 engine you could claim 74c per business kilometre (up to a maximum of 5,000 kilometres).

So 5 trips to client x 5kms (x 2 if you went back to work afterwards) x 74c = $37 tax deduction

D2       Work related travel expenses                      

If you have paid for a work trip (accommodation, flights etc.)

D3       Work related uniform, occupation specific or protective clothing, laundry and dry cleaning expenses              

If what you wear for work has a logo (eg. McDonalds) or you need steel capped boots or sunglasses (Tradies)

D4       Work related self-education expenses     

If you work and are doing a course relating to your work. I did an accounting cadet ship – so I claimed textbooks, stationary and car expenses.

People this might apply to: Accountants, Tradesmen, Apprenticeships.

D5       Other work related expenses                     Job

Other job work deductions not listed above which may include the business percentage of:

Working from home expenses – telephone, internet

For example you might claim 10% of your internet cost (10% x $50/month x 12 months) as you do some work from home and $80 for home phone calls (you made about 16 interstate long calls which cost about $5 each).

Depreciation from working from home assets – depreciation on a desk or computer you bought

Income Protection Insurance (life insurance is not tax deductible)

Non-work Deductions

D6       Low Value Pool Deduction                Business or Rental

Assets purchased put into a low value pool

D7       Interest Deductions                                       Bank

D8       Dividend Deductions                                     Shares

For example, if you spend time managing your share portfolio, you might be able to claim your magazine subscription, internet costs etc.

Unfortunately, if you only have 1,000 Telstra shares – the ATO might not like you claiming your subscription to Money Magazine (and they definitely won’t like you claiming your Foxtel subscription).

 

D9       Gifts & Donations                                          All

Receipts from amounts paid to charities (Note: you can’t claim when you get a pen, stuffed toy, raffle ticket etc.).

Usually charities give you a receipt that says that you can claim $x in your tax return. If not, you can look them up on The Australian Business Register at www.abr.gov.au

D10     Cost of Managing Tax Affairs                      Accountant

Your accountant’s costs for managing your tax affairs

Possible other costs to get your tax return lodged

 

Supplementary Deductions

D13 Personal Superannuation Contributions

If you are self-employed or receive more than 90% of your income not from your job (ie. business/investments), then you might be able to claim a deduction for money paid into super. You need to make the payment and tell your super fund so they issue you with a special notice that allows you to claim this deduction.

Other (Rare) Deductions

Aside from personal super contribution, the other supplementary deductions are rare. I have listed them below. Mostly they relate to special circumstances/industries where you can claim a deduction but the ATO want to know about it.

D11 Film Industry Incentives

D12 UPP of Foreign Pension

D14 Deduction for Project Pool

D15 Forestry Managed Investment Scheme Deduction

D16 Other Deductions

Posted in Tax
  • Liam

    I am unemployed but may have a job offer in Victoria, can I claim airfares and rental costs on my tax return? My family live in South Australia
    This will be week days only

  • http://www.nomoney.com.au Scott

    Probably not, unfortunately Liam. Given that you can’t claim home to work and work to home generally.

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