What are individual tax deductions?
Individual tax deductions are work-related or eligible personal expenses that reduce your taxable income, helping you pay less tax and increase your tax refund.
If you’re an employee earning a salary or wages, the ATO classifies you as an individual, and that means you’re eligible to claim individual tax deductions on your annual tax return. These deductions can significantly reduce your taxable income and boost your refund, but only if you know what to claim and how to claim them.
From occupation-specific expenses like non-slip shoes for nurses, teaching aids for educators, or fitness gear for personal trainers, to broader work-related costs like travel, uniforms, and mobile bills, individual tax deductions are more numerous than you might think.
Knowledge is everything:
To get the best possible refund, and avoid paying more tax than you should, it’s essential to understand which expenses qualify as individual tax deductions – and keep solid records every time you incur a work-related cost.
The more informed you are, the more confident you’ll be at tax time. Let’s explore how to make tax deductions work for you.
So what individual tax deductions can you claim?
Below is a list of common individual tax deductions that you may be able to claim; some of them may be a surprise to you. But remember, you can only claim genuine expenses that you have a receipt or other evidence for. The ATO is very good at picking up on claims that don’t seem quite right and if you’re caught out you could be in for a very hefty fine.
PLEASE NOTE: Not everyone can claim all of these expenses as individual tax deductions. This is because different jobs and circumstances affect what you can and can’t claim. Your tax agent will be able to advise what you are entitled to.
Individual tax deductions you may be able to claim:
FEES
- Professional membership fees
- Accounting fees including tax return preparation
- Union Fees
- Income Protection
EDUCATION
- Self-Education
- Course fees including text books (note: HELP/HECS repayments are not tax deductible)
- Professional libraries and work related magazines
EQUIPMENT
- Calculators and electronic organisers
- Computer related consumables
- Computers and laptops
- Internet usage (excluding connection fees)
- Ipad & similar small electronic equipment
- Phone – Home Office + Mobile + phone accessories
- Software
- Briefcases and carry-bags
- Safety equipment – e.g. sunscreens, hard hats, harnesses, safety glasses
- Sunglasses (if you work outside)
- Technical instruments
- Tools of trade
- Decline in Value for depreciating assets (where cost exceeds $300)
TRAVEL
- Tolls – where relevant to work related travel
- Motor Vehicle Expenses-e.g. fuel
- Parking Fees
- Public transport fares
- General travel expenses, including flights, taxis etc.
- Accommodation and meals (if away from home overnight)
HOME OFFICE
- Desks chairs and other office furnishings
- Home Office running costs
- Stationery
- Postage
CLOTHING
- Protective clothing
- Uniforms (with logo)
- Laundry of work uniform or protective clothing
MISCELLANEOUS
- Gifts
- Charity Donations
REMEMBER: You can’t claim an expense if you have no proof, so remember to get a receipt for every expense. Keep a logbook for car use and make sure you keep a record of any hours you work from home. If you’re not sure if you can claim an expense, ask your Etax Local Accountant, we’re always happy to help.
Getting in the habit:
Being organised with your expenses is a good habit to get into. Make sure you keep a clear record of your expenses, such as an excel sheet, a folder on your phone or even a notepad if you prefer. Keep your receipts all in the same, safe place and split them into months and years so they are easier to provide at tax time.
TOP TIP: Receipts have a tendency to fade, so snap a photo of each receipt when you get one. This also means you have an electronic version to share with your accountant too. Note: Etax Local provide all clients with secure access to our Client Portal so securely uploading and storing your receipts and other personal documents is simple.
Tax Agent
