20 tax deductions to help the ATO give you extra cash this year

Jul 14, 2018

OBSCURE tax deductions that are forgotten are costing millions of Australians bucketloads of cash at tax time.

From dance lessons and dog food to super contributions and sunglasses, almost anything is up for grabs as a tax deduction as long as it relates to people earning income.

Tax specialists say many fail to claim everything they can because they don’t understand the rules, are rushing for a refund and don’t seek advice, or want to stay under the Australian Taxation Office’s radar.

Etax.com.au senior tax agent Liz Russell said people should remember that the ATO’s job was to collect revenue, “not to help taxpayers claim all the deductions they’re entitled to”.

“Your refund is not free money. It’s money you’ve already earned being repaid to you by the ATO,” she said.

Society’s rapid shift online has created many new technology-related tax deductions. Here are 20 modern, unusual or often-forgotten claims that can potentially add hundreds of dollars to your refund this year.


Ms Russell said people listening to or reading books and journals directly related to their jobs could claim a tax deduction. “If staying on top of the news cycle is critical to your role, subscribing to various news outlets is another deduction Australians can often claim,” she said.


People who use their smartphones, iPads and other equipment for work can claim deductions for the work-related portion. NDA Law managing director Andrea Michaels said these deductions also extended to phone covers and screen protectors, and handbags used for carrying equipment or files.


Ms Michaels said more people were using apps at work for things such as PDFs and business cards, and these could be tax deductible. Other work-related deductions included “Office subscriptions for phones and tablets, printer ink for home printers used for work, home office furniture” and cloud storage for work files.


Energy costs households a small fortune, so why not claim back some of the expense? More Australians are taking work home, which means running costs such as electricity and gas are partially deductible. The ATO allows a standard deduction of 45c an hour for heating, cooling and lighting costs when working from home, or you can manually record expenses and claim the work-related use.


An election is looming and Deakin Business School associate professor Adrian Raftery said political donations were tax deductible. “It’s potentially up to $3000 per year — $1500 to a registered party and another $1500 for an independent,” he said. The ATO says individuals can claim deductions for donations above $2 to political parties, politicians and candidates, and also for membership subscriptions to registered political parties.


Employees who are designated first aid people in their workplace can claim for the cost of training.


For working animals such as farm dogs, service dogs and guard dogs, the costs of feeding them are tax deductible, as are vet bills and other animal expenses. Family pets don’t count, sorry.


“You can claim a deduction for the work-related portion of pay TV access payments if you can show that you are required to access pay TV as part of your work,” Dr Raftery said.


You can’t claim car expenses for travel between home and work but H & R Block director of tax communications Mark Chapman said people travelling to an alternative work location could claim.


Mr Chapman said these were deductible for small business owners who ran cafes or shops and played music for customers. “If you need music to set the ambience for your business, music subscription services like Spotify and iTunes can be tax deductible,” he said.


It’s not just personal trainers who can claim deductions for the cost of keeping fit. Other occupations that require high levels of fitness — such as defence personnel or sportspeople — can also claim.


Many people forget this one. “If you pay for insurance premiums against loss of income, those amounts are deductible,” Mr Chapman said. “But be careful: that doesn’t include life insurance or trauma insurance, and also excludes policies paid out of our superannuation contributions.”


If you dance for money, it’s deductible. Other performers who earn money from their work can claim for things such as costumes, wigs and makeup.


A rule change that came into effect in 2017-18 allows any worker to inject extra cash into their super fund and claim a tax deduction. This could help people offset capital gains or income elsewhere, said Matthew Illman, director at accounting and advisory firm William Buck. “This previously could only be done as part of a salary sacrifice arrangement,” he said.


Claiming the building cost of a rental property, typically at 2.5 per cent a year, can deliver investors big tax deductions without them having to spend money. Mr Illman said these capital works deductions were usually worked out by a quantity surveyor. “There have been some recent changes that limit certain tax deductions in relation to rental property fixtures, but this is often an area that goes unnoticed,” he said.


Real estate investors have a treasure trove of items that they can claim tax deductions for in their investment properties. These include shower curtains, cutlery, ironing boards and barbecues, but the rules are complex, so get advice.


People who borrowed money to join last year’s Bitcoin boom can claim a deduction for interest on their loan. Interest deductions also extend to investment loans for shares, property and other assets, but not for personal use.


Mr Illman said people who worked outdoors regularly were able to claim deductions for sunscreen, hats and sunglasses. “There may, however, be a need to apportion the deduction to incorporate private use,” he said.


You can claim the cost of washing your work uniforms — at 50c a load up to $150 a year — but the ATO has strict rules around this. It has produced more than 30 work-related expense guides covering industries such as teachers, cleaners, shop assistants and adult workers. Check if they can help you.


Business owners who buy gaming consoles or ping pong tables to improve their employees’ workplace can claim deductions for them.

Original article published here on 14 July 2018 in The Mercury.







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