16 Individual Tax Deductions Most People Don’t Know About
Doing up your tax deductions every financial year-end can be a real hustle. Most people try their best to claim as many legitimate tax deductions as possible to reduce that dreadful tax bill of theirs. While travel expenses and charitable donations are the few known deductions, there are many bonus deductions that can be claimed.
There is an extensive variation of services and products that you are legally entitled to claim as a tax deduction, as long as it is related to earning your income. These astonishing items range from video game consoles and Netflix subscriptions to pet dogs and sex toys.
One key thing to note is that in order to claim a work expense, the money has to be spent by you and not reimbursed by your employer. Evidently, this expense must be related to your job and a record has to be kept in order to prove it.
If you work outdoors for long hours, such as a tradie, construction worker or farmer, the sunscreen that you purchased as a protection from the harmful sun rays can be claimed as a deduction. If an outdoor related attire is required, such as hats, gloves and/or waterproof clothing if you work in a wet climate, can also be claimed.
Make-ups are a relatively specific deduction. General make-up is not claimable (even if it has UV protection) unless you work outdoors. Other the other hand, flight attendants can claim specific types of make-ups such as rehydrating moisturisers as part of their tax deductions.
Handbags and Backpacks
Handbags used to carry iPads, phones, calculators, stationery or any other items required for work can be claimed. However, great care is required here. These handbags must be “fit for work purposes” and essentially used for work. Naturally, a modest bag, genuinely used for work purposes only, is easier to claim as compared to a new Gucci bag. As for men, a work briefcase, satchel or backpack can be claimed.
If ambience is necessary for your business, works of art can be a possible deduction. You might even be able to acquire an instant deduction if you’re a small business (aggregate turnover that is less than $10 million) and the art piece costs less than $20,000. This can effectively help you decorate your public facing areas such as office receptions, meeting rooms, boardrooms and staff social rooms.
Education is a constant affair and often it can be a real ordeal to some. Not all educational expense can be claimed as a tax deduction unless the course you’re undertaking enhances your income earning capability or skills and knowledge within your current job – both the course and associated costs such as textbooks, travel etc. Without a doubt, the expense is not claimable if the course you’re undertaking progresses your career into a new field of endeavour
All kinds of unusual deductions that most people are not able to claim are claimable by people in the performing arts e.g. actors, musicians, dancers, magicians etc. These tax-deductible items range from musical instruments for a professional musician to dance and acting classes for professional dancers or actors.
Individuals working from home or maintain a home office as part of their job can benefit from this. An appropriate proportion of your household bills can be claimed as a work-related deduction. These expenses include electricity, other utility bills, depreciation on your office equipment as well as furniture costs incurred to keep your home office clean. There are 2 methods in which you can claim these expenses;
claim the actual costs based on a four week period diary
claim a flat rate deduction of 45 cents per hour
Shoes are an everyday necessity for everyone. However, this does not imply that any footwear can be claimed as a tax deduction. If you require specific occupational footwear or extra protection from the elements or dangerous materials, a deduction can be claimed. For example, work boots worn by tradies can be claimed as a tax deduction.
Pool Tables, Ping Pong Tables, Xbox Consoles and TVs
Offices with recreation areas for staff to frequent during breaks or lunch hours are claimable. For example, pool tables, ping pong tables, Xboxes and TVs are claimable as deductions as long as it is provided for staff use.
In addition, if you are a small business, an instant asset write-off of $20,000 can be claimed as an immediate deduction. TVs installed in reception areas for waiting customers or meeting rooms for video conferencing are also possible deductions that you can claim.
If you are subscribed to publications and products relevant to your trade or profession, the costs incurred can be claimed as a tax deduction. These include magazines, subscription TV, journals and/or professional association and trade union-related materials.
You can claim a tax deduction if you require a security dog to patrol your premises or if you use a dog in farming. These deductions can be claimed against the depreciation on your animal plus an immediate deduction for maintenance costs such as food and vet bills.
However, it is important to note that the animal must be for appropriate purposes i.e. your pet poodle is not deductible as a guard dog.
Typically, almost anything related to work can be claimed as a tax deduction. If you use a tool or a piece of equipment as part of your trade or professions, it is tax deductible. The term “tool of trade” varies depending on the type of professions you are in. As shocking as this may sound, sex toys are a sex worker’s tool of trade as much as a wrench or spanner is for a plumber.
Donations to Charity
If you recently made a donation to a charity, you’re in luck! Any donation above $2 can be claimed as a tax deduction, if you have the relevant supporting document i.e. a receipt and if it is paid to a Deductible Gift Recipient (DGR).
Most people use their own private phone for work-related calls, texts, emails and to even surf the internet for work-related purposes. But fret not as you can claim the work-related portion of your mobile phone bills against your tax.
If you have a work uniform that is claimable, then naturally the cleaning costs of either laundry or dry-cleaners can also be claimed.
Car expenses for work purposes can either be claimed as
The actual running costs incurred on work-related journeys (you must be able to provide a logbook of proof); or
A flat rate deduction of 66 cents per kilometre where you travel no more than 5,000 kilometres per vehicle per year.
However, work-related travel does not include the journey to-and-fro to your office building, which is regarded as a private journey. One exception for this is if you are required to transport heavy work equipment from home.
If you are facing any difficulties in deciding what can be claimed as a tax deduction for your year-end income tax, feel free to contact us. We are happy to be able to assist you in reducing your frustration of doing up your income tax statement!