Claiming Deductions

Work Related Deductions

During the financial year if you make any work-related purchases you may be able to claim the deduction on your tax return. Generally, if you need to spend money in direct connection with your income producing activities you may be entitled to claim a deduction for the expense. To claim a deduction for a work-related expense you must:

·         Have spent the money yourself and were not reimbursed

·         It must be directly related to earning your income

·         You must have a record to prove the money spent (usually a receipt).

For items that have been used for both work and private purposes you may still claim a reasonable estimate of work- related use. Some of the most common work-related deductions include:

·         Vehicle and travel expenses

·         Clothing and laundry expenses

·         Working from home expenses

·         Self-education expenses

·         Tools and equipment expenses

Other Deductions

You may be able to claim the donations that you have made during the financial year, to claim a tax deduction for your gift or donation it is required to be registered with a ‘Deductible Gift Recipient Status’. You can check a business or organisations status at https://abr.business.gov.au/Tools/DgrListing.

For a gift or donation to be tax deductible it must:

·         must be made to a DGR

·         must truly be a gift or donation – that is, you are voluntarily transferring money or property without receiving, or expecting to receive, any material benefit or advantage in return. A material benefit is an item that has a monetary value

·         must be of money or property – this can include financial assets such as shares

·         must comply with any relevant gift conditions – for some DGRs, the income tax law adds extra conditions affecting types of deductible gifts they can receive.

·         The gift or donation must have a value of $2.00 or more

If you have claimed a deduction on your income tax return, you are required to keep your receipt for a minimum of 5 years from when you lodge your tax return.

For more information visit the ATO.