Don’t Leave Money on the Table: Tax Deductions You Might Be Missing

Tax time can be a stressful period for many Australians, but it’s also an opportunity to ensure you’re getting the maximum refund possible. While most people focus on the obvious deductions, like work-related expenses and charitable donations, there are plenty of lesser-known deductions that could significantly boost your return. The trick is knowing what to look for.

In this guide, we’ll walk you through some of the top tax deductions that Aussies often overlook, helping you ensure that you’re not leaving any money on the table this tax season.

Why Claiming All Possible Deductions Matters

Every dollar counts, especially when it comes to your tax refund. Missing out on deductions means you’re potentially forfeiting money that could be rightfully yours. With the cost of living steadily rising in Australia, maximising your tax refund is more important than ever.

By understanding and claiming all the deductions you’re entitled to, you can put more money back into your pocket and use it to pay off debt, invest, or save for something special.

Top Overlooked Tax Deductions in Australia

Let’s dive into some of the most commonly overlooked tax deductions that Australians can take advantage of. You might be surprised by what you can claim!

1. Work-Related Travel Expenses

Many people know they can claim travel expenses if their job requires them to travel between different work sites, but there are often more deductible travel expenses than expected. This includes trips to client meetings, off-site training sessions, and even traveling between different job locations in the same day.

• Car expenses: You can claim a deduction for the use of your car if it’s required for work purposes. The easiest method is the cents-per-kilometre method, which allows you to claim up to 5,000 km per year without needing a logbook.
• Public transport: Did you take a bus or train to a work-related meeting? That’s claimable too.

2. Home Office Expenses

With remote work becoming the new norm for many Australians, home office deductions have become increasingly important. If you’re working from home, you may be able to claim a portion of expenses related to your home office setup.

• Electricity and internet: A portion of your household utility bills can be deducted if you’re using your home for work.
• Office furniture and equipment: Did you purchase a new desk, chair, or computer to work more efficiently at home? These items can be claimed as a tax deduction.

You can use the shortcut method introduced during the pandemic, which allows you to claim 80 cents for every hour worked from home, covering all your expenses.

3. Union Fees and Professional Subscriptions

Union fees and subscriptions to professional associations related to your work can be claimed as tax deductions. This is often overlooked, but if you’re paying membership fees for any work-related organisation, it’s worth adding to your claim.

• Union fees: If you pay union fees, those are fully deductible.
• Professional membership: Membership fees for industry bodies such as CPA Australia or Australian Nursing Federation are tax-deductible.

4. Self-Education Expenses

If you’re taking courses to improve your skills in your current job, those expenses are claimable. Many Australians miss out on this deduction, thinking it only applies to full-time students. In reality, if you’re enhancing skills directly related to your work, you can claim several education-related expenses.

• Course fees: Whether you’re studying part-time or taking short courses to upskill, the costs can be claimed.
• Textbooks and supplies: The cost of textbooks, stationery, and any other resources required for your course are deductible.
• Travel to classes: You can also claim the travel costs to and from your course or training sessions.

5. Tools and Equipment

Tradies, mechanics, and even office workers can claim the cost of tools or equipment that are essential for their work. If you’ve had to purchase any tools, machinery, or even computer equipment, these costs are deductible, either fully or as a depreciation over time.

• Tools under $300: For smaller purchases like handheld tools or minor equipment, you can claim an immediate deduction for items under $300.
• Depreciation for larger purchases: If you’ve bought more expensive equipment, you can still claim the depreciation value over a few years.

6. Donations to Charity

Donating to charity can make a difference in your tax refund too! However, it’s important to ensure your donations meet the Australian Tax Office (ATO) guidelines.

• Registered charities: Donations must be made to charities that are registered as deductible gift recipients (DGRs) to be claimable.
• Gifts over $2: Any donation of $2 or more is eligible for a deduction, but you’ll need a receipt to back up your claim.

7. Investment Expenses

If you’re investing in stocks, property, or other financial assets, there are various deductions you may not be taking full advantage of.

• Interest on loans: If you’ve taken out a loan to purchase an investment property or shares, the interest you pay on that loan is tax-deductible.
• Management fees: Fees paid to a financial advisor, investment manager, or broker are also claimable.

8. Protective Clothing and Laundry

If your job requires specific protective clothing, uniforms, or safety gear, the cost of purchasing and maintaining these items is deductible.

• Work uniforms: If your workplace requires you to wear a uniform, including one with a company logo, you can claim both the cost of the uniform and laundry expenses.
• Safety equipment: Workers in high-risk jobs can claim protective clothing like boots, gloves, and safety glasses.

Step-by-Step: How to Claim These Deductions

Claiming deductions doesn’t need to be complicated. Here’s a simple step-by-step guide to ensure you’re claiming what you’re entitled to.

1. Keep Records and Receipts

You can’t claim deductions without proof, so make sure you’re keeping records of all your expenses throughout the year. Whether it’s physical receipts or digital copies, ensure you’ve got a system in place.

• Receipts: Keep all receipts for any work-related or deductible purchases.
• Digital tools: Consider using apps like ATO’s myDeductions tool to store and organise receipts digitally.

2. Use the Right Tools for Lodging Your Return

Whether you lodge your own return using myTax or work with a tax agent, make sure you’re aware of all the deductions you can claim. Tax agents are particularly useful for finding deductions you may have overlooked.

3. Review Your Deductions Each Year

It’s easy to forget what you’re entitled to claim, especially if your work circumstances change. Each tax year, take time to review your expenses and ensure you’re claiming everything that applies.

Common Mistakes to Avoid When Claiming Deductions

While claiming deductions can boost your refund, there are also common pitfalls that Aussies should avoid.

• Claiming non-work-related expenses: Remember, only claim expenses that are directly related to earning your income.
• Not keeping receipts: If you can’t provide proof of purchase, you can’t claim the deduction.
• Over-claiming home office expenses: Make sure your home office deduction accurately reflects the time and space you use for work purposes. The ATO is increasingly strict on inflated home office claims.

The Bottom Line

Claiming the right tax deductions can make a world of difference when it comes to your tax refund. By keeping track of overlooked deductions like work-related travel, home office expenses, and professional fees, you can maximise your refund and avoid leaving money on the table.

This tax season, take the time to review your expenses, consult with a tax agent if necessary, and ensure you’re claiming everything you’re entitled to. Your wallet will thank you!