How to prepare for your individual tax return and make use of tax deductions:
As the financial year draws to a close, getting all your tax planning in order helps the year end process be as quick and as painless as possible. Be aware of any tax deductions that may be available to you, so that you can have all documentation ready for the tax season.
Common Deductions for Employees as a part of working:
A. Work Related Motor Vehicle Expenses: Work Related Motor Vehicle expenses are available for deduction when:
- You travel from your usual place of work to client, customer, supplier or the like
- You have to carry bulky tools or equipment to work, which you need to perform your job and cannot leave at your place of work
- Deliver items
- Attend conferences or meetings
- Travel between two places of work (from one job to another etc)
You cannot, however, claim any travel to and from your usual place of work to your home.
There are two methods of calculating the deduction:
– Cents per kilometre (limited to 5000km over the year) – this method needs no written evidence; however, you need to be able to substantiate your claim. This method will calculate your deduction at 66 cents per Kilometre travelled.
– Log book Method –This method requires you to have had a log book which records all travel, including personal use, for a minimum of 12 weeks. The business percentage is then used to work out the deductable amount of your Motor Vehicle expense. You must also keep a record of all car expenses, including servicing, insurance and registration. Fuel can either be actual amounts (if you have kept your records) or we are able to estimate the expense with the ATO method, using your average use.
B. Work Related Travel Expenses: Many people have to travel away from time to time for their work. Expenses that are incurred during this time that are not personal in use can be deductable.
– Work related travel can include meals, accommodation and incidental expenses while away overnight for work.
– The ATO has published reasonable travel and overtime meal allowance expense amounts that can be used for the 2018 income year.
– Other travel expenses you may be able to claim include work-related expenses for, but not limited to: air, bus, train, tram and taxi fares; carhire fees; parking and the like.
– If you are away for longer than 6 consecutive nights, the ATO requires that you keep travel records.
– You do need to make sure any travel allowance you have received from your employer is recorded as income, as shown on your payment summary.
C. Work Related Clothing, laundry and cleaning expenses:
- You can claim a deduction on the cost of buying and cleaning occupation specific clothing, protective clothing or a uniform
- This includes any clothing and footwear that will protect you from a risk of illness and injury that may arise due to the environment you work in. This does include sunscreen and sunglasses if you are required to work outside as a part of your normal work.
- You are able to claim up to $150 without written evidence, anything above that does require written evidence.
- You are able to deduct the cleaning of any of the above mentioned work wear, with either dry cleaning or at the ATO’s rate of washing – $1 per load of only work wear or $0.50 per load of mixed clothing.
D. Other work related Expenses – there are many other expenses that you incur as a part of your work, and many are deductible including
a) Telephone and internet expenses – taken at a % used for work
b) Computers, laptops and other equipment used for work
c) Union fees and subscriptions to associations
d) Conference and seminar costs
e) Books and stationery, including Diaries, pens etc used for work
f) Tools used for your trade, protective items and software
g) Do keep in mind that any costs combined that are over $300 in work related expenses do need written evidence and any equipment over $300 will have to be deducted over a few years.
E. Self-Education Expenses: Many expenses incurred as a part of undertaking further education or qualification to maintain or improve the specific skills/knowledge needed in your current job, or will result in or likely to result in an increase in your current job, are deductible. Including:
Books and stationery
Travel to your place of study (as part of travel)
Student union fees
Any accommodation needed for the duration of the course
Please do note that in most cases, self-education costs are reduced $250 before they become deductible.
Deductions available to all individuals:
– Gifts & Donations: any gift of donation that is over $2.00 is deductible as long as it is to a registered ‘deductible gift recipient’ and is not in return for goods. This means that you are unable to deduct raffle tickets, fundraising dinners, or bids on silent auctions.
– Cost of managing tax affairs: any costs associated with preparing your pervious years tax returns are deductible, this means that we will deduct your previous Shakespeare invoice, as long as it is paid, and if you provide us with an invoice from a previous tax accountant, if you are new to our firm.
– Income protection Insurance: if you have paid a premium on insurance for income protection during the financial year these are fully deductible.
– Personal Super Contributions: from July 2017 all personals super contributions are deductible, as long as you are between the ages of 18 and 75 and are below the maximum concessional contribution of $25,000.00. To do this you do need to notify your superfund with a “notice of intent to claim a deduction”, and you need to have received notification that they have received this notice of intent.
– Occupation Specific deductions: the ATO provides a list of occupation specific deductions for many different occupations. Please see https://www.ato.gov.au/Individuals/Income-and-deductions/Deductions-you-can-claim/Deductions-for-specific-industries-and-occupations/ to see if you are able to claim further deductions for your occupation.