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What You Should (And Shouldn’t) be Claiming on Your Tax Return

June 15th, 2016

Tax time rolls around every year, and every year it can become more and more confusing figuring out what you should or shouldn’t be claiming. In order to get the biggest return, whether you’re a working individual or a business owner, it (literally) pays to do your research and make sure you’re aware of all the benefits you could be receiving back from the Australian Taxation Office.

Here, we take a thorough look at the kinds of items and services you can claim on, so whether you’re using a tax agent or lodging your claim yourself, you’ll always get the maximum possible amount back in your account.

What should I be claiming?

Here’s a comprehensive list of items you should be claiming on your next tax return.

  • Your tax agent fees – First of all, if you’re using a tax agent to lodge your claim, be sure to keep the receipt for the service they’ve provided you – you’ll be able to claim it back on next year’s tax return!
  • The kilometres you’ve travelled for work – If you drive a lot for work, whether it’s from suburb to suburb or city to city, be sure to keep evidence of the kilometres you’ve travelled, as well as any incidental costs for getting to location to location (such as fuel top-ups). These expenses are generally cost deductible, so the next time you hop into your car to head to a meeting or run an errand, remember to jot down the kilometres travelled.
    Note: travel to and from your normal place of work cannot be claimed – only travel outside of the normal scope of your working day.
  • Any donations you’ve made – If you’ve been a generous soul this past year and have donated more than $2 to charity (and you’ve held onto the receipts), you’re able to claim this back on tax… now that’s what we call good karma! However, if you’ve received something in return for the donation (such as a branded novelty item or a ticket in a raffle) unfortunately you won’t be able to claim.
  • Work uniforms – If your position requires for you to wear a compulsory uniform that has a business logo on it, you’re able to claim these costs back. You also may be able to claim on dry cleaning costs (as long as you’ve kept the receipts). Remember that expenses of up to $150 don’t need to be supported with receipts.
  • Expenses associated with working from home – If you’re lucky enough to work from home, you’re able to claim back some of the costs that are associated with running a home office. You’ll need to keep receipt records of the costs that you’ve incurred, like internet bills, furniture, phone lines and stationery.
  • Sun protection – If your work requires you to be outside, whether you’re working on a job site for a full day or you’re just assessing a location for 15 minutes, you can claim back on sun protection costs. This includes hats, protective sunglasses and sunscreen – so once again, be sure to hold onto your receipts!
  • Overtime meals – If you get paid an overtime meal allowance as part of your job and you purchase food and drink when you work overtime, you can claim these costs back. You don’t have to provide written evidence if you claim up to the reasonable allowance expense amount (this will be set by your employer), but you’ll need to provide a receipt if you go over this amount.
  • Certain types of self-education – If you undertake a type of study that leads to a formal qualification and improves the specific skills or knowledge you need to undertake your current work activities, you may be able to claim the course costs back on tax. If completing the course might result in an increase to your income, you can claim a deduction for these self-education expenses. You can’t claim on a course if it’s only ‘generally related’ to your work activities, or if it enables you to get new employment.

What can’t I claim back on tax?

There are many things you can claim back when it comes to tax time, however there are also many things that you can’t – and sometimes it can be easy to get confused between the two! Here are a few things that you’ll need to leave out of your next tax return.

  • Normal trips between home and work – Unfortunately, the cost of your regular commute (whether it’s by car, train, bus or tram) is not something that can be claimed back on tax. It’s viewed as ‘private travel’.
  • Conventional clothing – Although you may be able to claim back on uniforms and protective clothing needed specifically for your line of work, you can’t claim for anything that’s considered to be ‘conventional clothing’. For example, if you work outside and wear long-sleeve shirts because your arms get sunburnt, this isn’t deductible, as a long-sleeve shirt is okay to wear to and from work and can be classified as ‘regular clothing’.

What do I need to do to make a claim?

If you had tax taken from any income that you made in the previous financial year, you need to lodge a tax return. You can either choose to lodge your tax return using an online service like the Australian Taxation Office’s myTax portal, or you can use a tax agent.

To lodge a tax return yourself, you’ll need to register with myGov and have your tax file number ready. It’s important to make sure that you’re organised before starting your tax return (although you can always save it and come back to it later) by making sure you have all your records and receipts ready to go.

Alternatively, you can take your PAYG summaries, records and receipts to a tax agent and have them lodge your return for you. Remember that only Registered Tax Agents are allowed to charge a fee for this service, so make sure to research that you’re working with a reputable company or individual.

End of Financial Year

For more tips to get the most out of the end of financial year for your finances, check out our Guide to the End of Financial Year. We’ve put together a lot of the information you’ll need in one place for ease.

Sources:

https://www.ato.gov.au/Individuals/Income-and-deductions/Deductions-you-can-claim/

http://www.lifehacker.com.au/2015/06/five-deductions-you-cant-claim-in-your-tax-return/

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