Ten useful Tax deductions

Over the next few weeks as Australian tax time approaches I am going to take a look at common tax questions, tax minimisation strategies and investing related tax topics. This post looks at some tax deduction question and answers that I think are applicable to a lot of people.

1. Can I claim books, journals and ongoing subscriptions that are related to my job?
If technical books, trade books or professional subscriptions are necessary to fulfill a job function efficiently then the cost of their acquisition is deductible. You must keep receipts of payments.

2. Can I claim fees paid to my tax agent?
Fees paid to a registered tax agent for preparation of your return, amendments and generally handling your tax matters are all deductible. You can also claim travel to your registered tax agent. Registered tax agents are the only people legally able to charge for the preparation of tax returns.

3. I keep a room set aside in my house for a home office and would like to claim some expenses.
If a taxpayer carries on all or part of their employment activities from home, then some portion of the home expenses can be deducted. Where a home is a place of business, deductions can be claimed on the following items of expenditure - interest, rent, house insurance, council rates, heating and lighting, depreciation, insurance, repairs, cleaning, pest control, maintenance, decorating and telephone. Remember, you also need to declare all related income.

4. I need to have a telephone for making and receiving business calls and would like to know what I can claim.
Installation costs are not deductible. However, part of the rental costs are deductible where a taxpayer is required to make calls from home. Call costs would be deductible and a log of calls must be kept. Mobile phones are claimed in the same way.

5. I have had to pay for child care during the year. Is this claimable on my tax return?
These expenses are not claimable as a tax deduction. Eligible taxpayers may be able to claim the 30% Child Care Tax Rebate.

6. I have incurred travel expenses this year. What can I claim?
Your travel must be relevant to your job function for you to claim a deduction for those expenses - and provided your employer has not already reimbursed your for these. Where this is the case you can claim the cost of transportation and incidentals. If your travel involved an overnight stay you would be able to claim for meals.

7. Is there a limit on how much I can claim as a tax deduction each year?
There is no limit on the amount claimed each year. The expenditure must be work related and you may need receipts to substantiate the expenditure. Keeping incomplete, incorrect or no records at all may be limiting your ability to claim deductions. Advice can be obtained from a registered tax agent or your accountant.

8. Is a credit card slip acceptable as a receipt?
Yes, provided it gives full details of the supplier and date of purchase. Taxpayers can make a notation on the receipt indicating the type of goods that were purchased. Many taxpayers use the internet to purchase or pay for their work related expenses. The ATO will accept Bpay or email receipts provided they contain the necessary information: date, supplier, nature of the goods and the amount.

9. Can I claim a deduction for sun protection items?
A deduction is available for outdoor workers who buy sunscreen lotion, sunglasses and hats for use at work. The claim must be substantiated and adjusted for private use.

10. How long do I need to keep my receipts?
Documentary evidence should be keep for five years from the date of lodgment of the tax return in which the claims are made.

Related Tax Posts:

- Proposed 2008-2009 tax cuts
- Save time - 3 Free sources to get your Australian dividend and tax information online
- 2007/08 Australian Tax Brackets and Capital Gains Tax

Parts of the above article were sourced from H&R Block