Understanding tax deductions is about more than just keeping receipts, it’s about knowing how your expenses relate to your income. If you’ve ever wondered what you can legally deduct, here’s a handy breakdown to help you maximise your next return.
Tools, Computers and Work-Related Items
If you’ve purchased tools, a laptop, or other equipment specifically for your job, you may be able to claim either the full amount (for items under $300) or depreciate the cost over time (for items over $300). Even repairs, insurance and some maintenance costs may be deductible when used to generate income.
Working From Home
If you work from home, even partially, you can claim a portion of your household running expenses. This could include electricity, internet, and even depreciation on office furniture. You don’t need a dedicated office space to qualify, but your records must support your claim. The ATO offers several calculation methods, so it’s worth checking which suits your circumstances best.
However, claiming occupancy expenses for a dedicated home office can potentially impact the capital gains tax exemption you receive when you sell your home. It’s always smart to talk to your accountant to weigh the upfront tax savings against potential capital gains tax down the line.
Clothing and Uniforms
Not all workwear is claimable, that crisp white shirt or smart black pants might be part of your dress code, but unless the clothing is a compulsory uniform, has a logo, or offers protection, for example, high-vis, boots, or sun-safe gear, it usually doesn’t count. You can, however, claim laundry costs for eligible workwear.
Education and Training
If a course, workshop, or qualification directly relates to your current role, you may be able to claim the cost as a deduction. This includes tuition fees, textbooks, and some travel to attend classes. The keyword here is current, the ATO doesn’t allow claims for study that’s aimed at getting you into a new career, only for upskilling in the one you’re already in.
Memberships, Accreditations and Fees
Union fees, professional memberships, and subscriptions to industry-related publications are all tax-deductible. These expenses are considered necessary to stay informed and connected in your field, so they’re generally viewed favourably at tax time.
Cars, Transport and Travel
If you use your car for work, there’s a good chance you’re entitled to claim the cost of that travel, so long as it’s not your usual commute. Travelling between work locations, client meetings, or carrying equipment counts as deductions. You’ll need to keep a logbook or use the cents-per-kilometre method, but the key is solid record-keeping.
Meals, Entertainment and Functions
In most cases, meals and entertainment expenses aren’t tax-deductible, especially if they’re part of social or personal activities. However, exceptions do exist. If you’re attending a work-related conference, seminar, or training session where meals are included as part of the event, you may be eligible to claim them, as long as the purpose is professional, not social.
How Long Should You Keep Your Records?
The ATO generally requires you to keep records for five years from the date you lodge your return. This applies to receipts, invoices, logbooks, and any other documents that support your claims. Staying organised throughout the year makes tax time far less stressful, and ensures you’re covered if the ATO ever comes knocking.
Make the Most of What You’re Owed
Understanding your deductions can make a big difference to your bottom line at tax time. From tools and travel to uniforms and internet bills, the range of claimable items is broader than many people realise. The golden rule? Keep your receipts, track your work-related expenses, and seek tailored advice when needed. At Kadota, we’re here to help Melbourne residents and businesses ensure they’re not leaving money on the table.
