What Can You Claim?
Understanding what you can and cannot claim as a tax deduction is one of the most common questions Australians ask at tax time. While claiming legitimate deductions can reduce your taxable income, it's important that every claim is directly related to earning your income and that you have the necessary records to support it.
This guide provides general information about common tax deductions. As every person's circumstances are different, we recommend seeking professional advice before lodging your tax return.
A tax deduction is an expense you incur while earning your assessable income. Eligible deductions reduce your taxable income, which may reduce the amount of tax you pay.
To claim most work-related expenses, three general principles apply:
Depending on your occupation, you may be able to claim eligible expenses including:
Many Australians work from home either full-time or part-time. You may be able to claim eligible home office expenses such as:
If you use your own vehicle for work purposes, you may be entitled to claim eligible motor vehicle expenses. Examples may include:
Travel between your home and your regular workplace is generally not deductible unless a specific exception applies. Keeping accurate records, such as a logbook where required, can help support your claim.
Education expenses may be deductible if your study directly relates to your current employment and helps you maintain or improve the skills required for your job. Examples include:
If you purchase tools or equipment required for your work, you may be able to claim eligible costs depending on the nature and value of the items. Examples include:
Property investors may be able to claim expenses relating to their rental property, including:
Maintaining detailed records throughout the year makes preparing your tax return much easier.
Business owners and sole traders may have additional deductible business expenses such as:
Keeping business and personal finances separate is recommended for accurate record keeping.
Good record keeping is essential. Keep copies of:
Digital copies are generally acceptable provided they remain clear and accessible.
Some of the most common mistakes include:
Taking the time to organise your records can help avoid delays and unnecessary amendments.
Understanding tax deductions can be complicated, particularly if you have multiple income sources, investment properties or your own business.
The experienced team at PRZ Tax can help prepare your tax return accurately, explain the deductions that may apply to your circumstances and ensure your return is completed in accordance with Australian tax requirements.
Whether you're an employee, sole trader, investor or company director, we're here to help make tax time easier.
Contact PRZ Tax today to book an appointment with one of our experienced accountants.