Every year millions of Australians miss out on taking advantage of a large number of legitimate tax deductions. It is highly valuable for employees and employers alike to determine if they are getting the full tax refund that they are entitled.
Here are some tips to help you make it easier to gain access to your much-deserved tax deductions.
Ask your tax agent questions
According to figures from the Australian Tax Office (ATO) 74% of Australians use a tax agent to assist them with figuring out every tax deduction that they are entitled to.
If you aren’t currently one of the 74% it is a good idea to ask your tax agent about tax-deductible expenses and what you can claim. Often by doing so they will most likely suggest an additional deduction you didn’t think about.
An example of a tax deduction that is not commonly known by the majority of Australian taxpayers is that unless you are paid via your superannuation, you are eligible to claim your income protection insurance premiums.
Claim Work-Related Mobile Phone Expenses
Australians who use their mobile phone for work-related calls you also claim a percentage of their annual mobile phone bill on their tax return.
To figure out how much you are able to claim, you will need to provide a monthly account statement from a “typical” month, and a calculator. Work out the percentage of work-related calls that were made, and then claim that amount on your yearly bill.
Claiming your mobile phone expenses has the potential to give your tax return a major boost. If 40% of your calls are work-related, and you spend $660 a year on your phone bill. This means you would be eligible to claim $264 of work-related mobile phone expenses on your tax return. For an Australian who earns $60,000, that could mean more than $70 more in your refund!
Claim Work-Related Car Expenses
Australian workers who are required to use their personal car for employment related reasons besides driving to and from work, are generally able to claim fuel and maintenance costs as a tax deduction.
The method for calculating the deduction can be done in two different ways. The first method is to use a 12-week logbook. This logbook generates numbers that can be re-used for five years. The second method is for the worker to use the cents per kilometre method.
The Australian Tax Office (ATO) defines work-related kilometres as “kilometres travelled in your car while you are earning your income”. To be eligible for this deduction you must be the owner of the car and your travel must be part of your working day.
Examples of travel that is part of your working day includes; driving between different offices, driving from one job site to the next or trips to the post office or to the bank (this excludes stop-offs on the way home from work).
You are unable to claim trips between work and home unless you are carrying heavy equipment for work, or transporting heavy tools which are required for you to do your job.
Claiming Working from Home Expenses
If you are currently working from home and checking or responding to your work emails in the evening or over the weekend you might be able to claim the cost of using your personal computer as a tax deduction.
The ATO permits employees who have to work from home occasionally to claim part of their home office expenses. Employees who work the entirety of their job from home are typically eligible to claim the “occupancy cost” of their home office space as a tax deduction. Expenses that are eligible to be claimed include; equipment, software, furniture and also a percentage of your mortgage, rent and electricity bill.