It’s that time of the year that brings good cheer! And no, we’re not talking about Christmas. But it sure feels like it.
It’s tax return time! It’s the season we get some of our hard-earned money back, which we can put into our savings, paying off debt, or buying ourselves a well-deserved treat. There is, of course, a process to follow. We need to make sure we do it right so the ATO doesn’t stress us with an audit. Thankfully, there are tools like Frollo that can help you keep track of these items you can claim in your tax return.
When it comes to tax deductions, the general rule is to declare all expenses that are work-related. This means what we can claim in our tax depends on how we earn income. There are some provisions to the items we can claim, so some of these tend to be forgotten. But it’s always good to know what these are so that if they apply to you, then hey, more money for you!
Here are 12 items people commonly forget to claim on their tax deductions:
1. Mobile Phone & Internet Expenses
If you use your phone and your personal internet connection to make work-related calls, you can claim it on your tax. Unfortunately, you can’t claim the whole thing. We’ll have to figure out how much these work-related phones calls cost.
Here’s how we can calculate it. Let’s say we’ve made 100 calls in a month. 25 of those calls are work-related, which makes 25%. If the monthly bill is $50, then we can claim $12.5/month (because 25% of $50 is $12.5) or $150 for the year ($12.5/month x 12 months).
2. Work Clothes & Laundry
Work clothes and laundry are also tax deductible. But before you go ahead and list those new bellbottoms down, there are provisions to keep in mind. You can only claim this if the clothing is occupation-specific, which means it must not look like something you could wear every day, like plain black pants. The public must also easily identify what your profession is through these clothes. So that yellow jacket isn’t tax deductible unless you’re a tradie. You can view ATO’s occupation and specific guides here.
You can also claim protective clothing as long as they have protective qualities to keep you from harm at work. And keeping these clean is a must, so you can also claim $1 for every wash. That’s $52 for the year if you wash them at least once a week.
While you can’t claim ordinary clothes, that backpack you bring to work may be tax deductible. According to the ATO, bags used to carry work documents and laptops are claimable. Don’t go crazy just yet though. If the bag costs more than $300, you’ll need to calculate its depreciation. Bags used for work, if under the $300 threshold, can be claimed in full. If you’re planning to get a new backpack, make sure to keep the receipt!
4. Home-office Expenses
If you find yourself working from home, there are things you can claim as well. You can claim for your home-office supplies such as inks, paper, desks, chairs, paper shredder, printer, computer and even bins if you have a designated office work area at home. As long as they’re directly related to how you make your income, you can claim it. You can also claim for heating, cooling and lighting your home-office, which is 52 cents per hour. That’s at least $52 if you’ve worked from home for 100 hours throughout the year. See ATO’s guide on home office expenses here.
If upping your game at work is your thing, then you can also claim that in your tax. As long as the course is directly related to your current employment and will boost your income or get you a promotion, the expenses are tax deductible after the first $250. You can also claim for travel expenses, textbooks, stationery, student union fees, and amenities fees. If you’re taking the course with the intention of moving to a different career, say from marketing to hospitality/culinary, then, unfortunately, you can’t claim this on your tax. To work out how much you can claim, check out ATO’s guide here.
6. Subscriptions & Books
If you’re personally paying for journals and publications, and well anything that can boost your knowledge/skills in your current role, then you can also claim these on your tax. People who work in media can claim Netflix subscriptions on their tax as a “form of research.” Bookworms can also claim for books on taxes (as long as they’re directly related to your work), so don’t include the whole 50 Shades of Gray set because this might alert the ATO to audit you. Better to be safe than be chained and whipped by painful fees.
7. Union/Professional Organisation membership fees
If you’re part of a union or a professional organisation, you can claim the membership fees on your tax as well. As long as it’s directly related to your assessable income. Gym memberships are a no-go unless being fit is an actual requirement at work. According to the ATO, you can claim up to $42 annually for each subscription.
They say that being kind to others will make the world kinder to you. Well, ATO’s got that covered too. If you’ve been donating out of the goodness of your heart to help the causes, then you can claim that on your tax. But these organisations need to be recognised as Deductible Gift Recipients (DGRs). You can check if the charity you’ve been donating to is considered a DGR here. There’s merit to check before making a donation. Not just for tax deduction purposes, but this is also a way to make sure you’re not getting scammed.
9. Income protection
If you’ve got insurance for your income, then you can claim that on your tax as well. As long as the policy is separate from your super, then that premium is tax deductible.
10. Tax-agent fees
If you’ve lodged your tax return through a tax agent last year, then you can claim that amount to this year. The fees to the one you’re just about to visit can be claimed towards the end of the financial year again. Even if it’s free to do by yourself online, I guess it pays (all puns intended) to visit a tax agent to help you properly lodge your claims this time.
The Bottom Line
When it comes to tax returns, you can claim a lot, really. The general rule: you can claim it as long as it’s directly related to your work and your assessable income. But again, don’t go crazy because the ATO’s already been vocal about being extra strict this year. So if you decide to claim a Gucci handbag, then you might just get audited.
You should also keep your receipts for everything. No proof, no goof. #ShowReceipts!
If you’re having a hard time trying to remember all these tax-deductible expenses, be sure to use Frollo’s new tagging feature.
You can now use #hashtags to pull similar transactions in one list. When you remember a transaction you’ve made that’s tax deductible, you can search for them in your transactions and #hashtag them.
You can also start using this feature now that the new financial year has just begun. #Hashtag these tax-deductible transactions as you go, so come the next EOFY, you’re all set to claim.
Watch the video below to see how you can make the most out of this new feature:
If you’ve found this helpful, let us know! We’d love to hear from you!