10 Tax Deductions You Shouldn't Miss in 2024

Tax season can be less daunting with a bit of preparation. Here are some tax deductions you might be eligible to claim this year.

Everyone looks forward to getting a refund from the Australian Taxation Office (ATO) when they file their tax returns. While large corporations have accounting teams handling their taxes, many individuals and businesses manage this on their own. Understanding the tax deductions, you can claim is essential before you start preparing your tax return for the financial year.

Understanding Tax Deductions

A tax deduction allows you to reduce your taxable income by the amount of certain expenses incurred while working. These expenses can include work-related costs, accountant fees, or donations to eligible charities. As per the ATO, employees must have records showing:

• The purchase of the expense (usually a receipt; a bank statement alone is insufficient)
• That the money was spent by you and not reimbursed
• The expense directly relates to earning your income

For expenses that are both personal and work-related, you need a record to show how you calculated the deductible portion. For businesses, expenses must be business-related and supported by records.

Employee Tax Deduction Tips

1. Office Furniture Expenses

Your sit-stand desk, ergonomic mouse, and extra monitor you bought for could be deductible. The ATO allows two methods for calculating these expenses: the rate method and the actual cost method. The rate method offers a fixed rate per hour, covering running expenses like phone, internet, and utilities. The actual cost method requires detailed records of each expense.

2. Mobile Phone Calls

If you use your personal phone for work, you can claim the work-related portion of your phone bills. Keep track of work versus personal use, and remember, if your employer reimburses you, you cannot claim these expenses.

3. Work Bag

A bag used solely for work purposes, such as carrying a laptop or work documents, can be deductible. However, high-end fashion bags like a Gucci clutch won’t qualify unless they are specifically for work use.

4. Accounting Costs

Expenses for professional tax services from the previous year are deductible. Ensure you keep all receipts.

5. Membership Fees

Fees for professional organisations or unions related to your job can be claimed as deductions.

6. Car Expenses

Using your car for work purposes can be deductible. The ATO offers a logbook method or a cents-per-kilometre method to calculate these expenses.

7. Travel Expenses

Overnight travel for work, including meals, accommodation, and fares, is deductible. You must keep records showing the travel was work-related and not reimbursed by your employer.

8. Study Costs

If your education or training relates directly to your current job, you can claim course fees and textbooks expenses.

9. Insurance

Premiums for insurance against loss of income are deductible, but this excludes life insurance, critical-care insurance, and trauma insurance. Business property insurance and home insurance for home-based businesses may also be claimed.

10. Office Supplies, Training, and Equipment

Businesses can claim deductions for necessary office supplies and training expenses. For example, new POS equipment for retail businesses or training courses can be deducted. The 'small business skills and training boost' provides an additional 20% deduction for eligible training expenses until 30 June 2024.

Staying Organised with Tax Receipts

Keeping track of receipts is crucial for tax preparation. Use document boxes, filing system or digital solutions like scanning receipts and storing them on your computer or cloud storage. The ATO’s myDeductions tool is a handy app for both employees and sole traders to manage receipts.

The Benefits of Claiming Tax Deductions

Claiming deductions can significantly reduce your taxable income. Even small claims can add up to substantial savings. For more detailed information on what can be claimed, visit the ATO website for individuals and businesses.

Note: This is general information only. Seek professional financial or legal advice tailored to your specific needs.