As Australians, we know that taxes are an inevitable part of our lives. Whether we like it or not, taxes are a part of our obligation when earning income, and we have to try to reduce our income tax liability by claiming tax deductions.
However, many of us forget to claim certain tax deductions that we are entitled to. In this article, we will discuss six tax deductions that may slip your mind when lodging your income tax returns. These could help reduce your taxable income and maximise your tax refund.
1) Home Office Expenses
If you work from home, you may be eligible to claim partial home office expenses. This includes expenses such as electricity, gas, internet, and even a portion of your rent or mortgage interest. Keep in mind that you can only claim expenses that are directly related to your work, and you must have a designated workspace in your home.
2) Vehicle Expenses
Do you use your personal vehicle for work-related purposes? You may be able to claim vehicle expenses such as work-related km’s travelled, fuel, repairs and maintenance. However, you need to keep detailed records of your travel and expenses to prove that they were work-related.
Have you made donations to a registered charity? You can claim a tax deduction for the amount donated. Keep in mind that you can only claim a deduction for donations made to registered charities and that you need a receipt or proof of the donation.
4) Education Expenses
If you have enrolled in a course related to your current work or profession, you may be able to claim a tax deduction for the cost of tuition fees, textbooks, and even travel expenses. However, the course must be directly related to your current work or profession.
5) Income Protection Insurance
If you have income protection insurance, you may be eligible to claim a tax deduction for the premiums paid. This can be especially beneficial if you are self-employed or have an irregular income.
6) Work-related Uniforms
Are you required to wear a uniform or specific clothing for work? You may be able to claim a tax deduction for the cost of purchasing, cleaning and repairing the uniform.
As you can see, there are many tax deductions you may be entitled to that may have slipped your mind. It’s important to keep accurate records and seek professional advice if you’re unsure about what you can and cannot claim. By maximising your tax deductions, you can reduce your taxable income and potentially increase your tax refund.
Did you know that you may be eligible for tax deductions that you’ve forgotten about? In our recent blog post, we listed six commonly forgotten tax deductions that can reduce your taxable income and potentially lead to increasing your tax refund.
Stephen is the CEO of Accountants Direct and is a Professional Director, ASIC Agent, Startup Advisor & Investor & Capital Raising Specialist.
Contact Stephen or his team if you have any questions about this post or any business matter in general.