Tax time can be a stressful time for many, but it doesn’t need to be. Knowing what tax deductions you can and cannot claim may help you to maximise your tax return.
Claiming tax deductions
Tax deductions can help reduce your taxable income. You’re entitled to claim deductions for some expenses where you can get back some but not the full cost of the tax-deductible item or service you are claiming. To help you prepare for tax time, please see below some eligible expenses you may be entitled to claim.
To claim a deduction on work-related expenses:
If you’re an employee who works from home, you may be able to claim a deduction. The ATO has more information about how to calculate working from home expenses.
Income protection premiums
If you have an income protection policy outside super, you could claim the premiums you’ve paid in that financial year as a tax deduction. Policies paid for out of your superannuation contributions are also not allowed. If you have any questions regarding your insurance and tax return, please feel free to reach out.
You may be able to claim the cost of earning interest, dividends, or other investment income. Examples include interest charged on money borrowed to invest, investment property expenses, investing magazines and subscriptions and money you paid for investment advice. Something to be mindful of though is if you have a joint account, you can only claim your share of the fees. The ATO has more information about investment income deductions.
If you dispose of an asset – property, shares, crypto or NFTs, collectables (costing $500 or more) – you will need to calculate the capital gain or loss and record this in your tax return. Capital gains tax (CGT) does not apply to personal use assets such as a boat if you bought it for less than $10,000. Each cryptocurrency and share you hold is a separate asset for CGT purposes. When you dispose of one cryptocurrency to acquire another, you are disposing of one CGT asset and acquiring another CGT asset. This triggers a taxing event.
If you are realising any gains, you can offset this from the sale of investments that are underperforming and minimise your CGT liability.
A deductible gift recipient (DGR) is an organisation or fund that registers to receive tax deductible gifts or donations.
Not all charities are DGRs. For example, in recent times crowdfunding campaigns have become a popular way to raise money for charitable causes. However, many of these crowdfunding websites are not run by DGRs. Donations to these campaigns and platforms aren’t deductible.
You can check the DGR status of an organisation at ABN Look-up: Deductible gift recipients
You can only claim a tax deduction for gifts or donations to organisations that have the status of deductible gift recipients (DGRs). To claim a deduction, you must be the person that gives the gift or donation and it must meet the following 4 conditions:
For specific advice about tax implications that relate to your personal situation, please contact your tax agent. If you need assistance in developing a financial plan that considers your needs, I’d be more than happy to have a chat.
The information in this website and the links has been prepared for general information purposes only by our research partners and does not take into account your personal objectives, financial situation or needs. It is not intended to provide commercial, financial, investment, accounting, tax, or legal advice. You should, before you make any decision regarding any information, strategies, or products mentioned on this website, consult a professional financial advisor to consider whether it is suitable and appropriate for you and your personal needs and circumstances.