How to maximise your tax deductions?

Are you wanting to maximise your tax deductions this year?

Tax Deductions Introduction

For most individuals your 2023 income tax return is due for lodgement by the 31st October 2023. Some individuals who use tax agents to prepare and lodge their income tax return do get an extended lodgement deadline. Firstly, It is important you login into your MyGov Account to check the due date of your tax return. Therefore, you can act upon and potentially avoid any late penalties applied to your account.

Secondly, accurately declaring all your income will ensure that you are compliant with the tax legislation. This also means that you should be reviewing your circumstances to see if you are entitled to any tax deductions to apply against your taxable income. However, be vigilant not to claim any disallowed deductions as this could result in penalties. Reviewing the deductions that you may be entitled to can be broken down into different categories.

I have outlined below some key tax deductions that you may be entitled to claim:

1. Work related Travel Expenses

Work travel between two separate places of work can be deductible. This does not include home to work travel as this is private in nature. Where you are carrying bulky tools that cannot be stored at your workplace can allow you to claim the travel expenses. Traveling to an alternative place of work for work or training can also be regarded as deductible. 

2. Work Tools and Equipment

Tools and equipment that is used in your business/work related can be deductible. You would need to make sure that you apportion the private use of the equipment to ensure you are claiming the right amount. Items such as computers, laptops and software can all be deductible if there is a work related use. You can be eligible for an immediate deduction for items that cost $300 or less. Above $300 you would need to calculate the decline in value so you can work out your eligible claim.

3. Self Education Expenses

You are entitled to claim self education expenses where there is a nexus to your work activities. This would include TAFE courses that relate to earning income in the current job. Increasing your income as a result of self education can enable you to claim the education expense. Without sufficient nexus to your employment activities you will not be able to claim the expenses. 

4. Motor Vehicle Expenses

Motor Vehicle Expenses can be claimed up to 5000 kms work related kilometers without substantiation. A travel diary would still need to be shown that shows the calculation for the claim. After that, a logbook is required to validate the kilometers traveled. Alternatively you can also record the motor vehicles expenses incurred throughout the year and apply a work related use based upon a 12 week log book that you have recorded. 

Speak with a qualified accountant you can ensure that you are receiving the right advice to claim the deductions that you are eligible for. For a free initial consultation, head to the DF Business Advisory website. Download the free Tax Information Checklist and book an appointment and get started.

Tax Deductions Summary

This is not an exhaustive list of all tax deductions that you may be able to claim, rather some categories that you may seek to research and review if you are entitled to the deduction. The information provided in this article is general in nature and does not take into account your unique circumstances. Speak to a licensed professional advisor to meet your specific circumstances.