Record-keeping and ensuring you make the right tax claims\u00a0are important as tax season rolls around. Whether you run a small business, are an employee or own a rental property, understanding what you\u2019re able to claim on your tax return is crucial for your future tax planning come tax time.<\/p>\n\n\n\n
Disclaimer:<\/strong>The content provided is not intended to be tax advice<\/em>. It does not take into account your objectives, financial situation or needs.\u00a0Origin recommends you seek your own independent tax advice prior to lodging your tax return.<\/em><\/p>\n\n\n\n Simply put, tax deductions are permissible reductions in your taxable income, that are recognised by Australian tax law. Tax-paying individuals and businesses can claim certain expenses or contributions related to their work. These deductions reduce the amount of income you’ll be taxed on \u2014 effectively decreasing the overall tax liability, providing financial relief and greater tax savings. Did you use a tax agent to prepare and lodge your tax return last year? If you did, then you can claim the amount you paid last year \u2013 on this year\u2019s return. On your tax return, simply put the amount you paid in 2023 into section D10 \u2013 \u201cCost of Managing Tax Affairs\u201d<\/a>. The fees you pay for tax return help are always tax deductible. <\/p>\n\n\n\n If you’ve been generous over the past financial year, it\u2019s an added perk that your donation may extend beyond a good cause to a tax break. Donations of $2 or more to organisations that have the status of a deductible gift recipient<\/a> are tax deductible if you have a receipt. <\/p>\n\n\n\n You\u2019re entitled to claim tax deductions for insurance premiums paid against the loss of income. Remember though, this doesn’t include life insurance, trauma insurance or critical care insurance.<\/p>\n\n\n\n Many people think they are a share trader rather than an investor<\/a>, make sure you know the difference to ensure you lodge your tax correctly this year. <\/p>\n\n\n\n It\u2019s important for investors to include any capital losses not used to offset current year capital gains on their tax return in the year they occur. By including capital losses on a tax return, they’re available to use in future years and can prevent you being contacted by the ATO when the loss is used in future years. Remember, investors can\u2019t use capital losses to offset income like wages. Business owners also need to prove they have made a genuine attempt to recover any bad debts that may have arisen. Your financial advisor can explain how to document the debt as evidence the amounts were written off before the end of the financial year. <\/p>\n\n\n\n With tax deductions, every little bit counts. Prepaying your expenses (such as with PAYGI<\/ins>) can attract a tax deduction that is commonly overlooked. <\/p>\n\n\n\n Small business owners and rental property owners can prepay expenses such as subscriptions, business travel expenses, training events, leases, rent, phone, internet, insurance and business asset repairs (note these can\u2019t exceed more than one year and the expenditure must be over $1000). <\/p>\n\n\n\n One of the most common mistakes when owning a rental property is not understanding what can be claimed and when, in particular repairs and capital expenses. Repairs can generally be claimed immediately, but any improvements and capital expenses must be claimed over time.<\/p>\n\n\n\n Any work done before earning any income from the property is considered to be part of the acquisition cost and can\u2019t be claimed unless it\u2019s capital works or a depreciating asset, which gets claimed over a number of years. Acquisition costs can be used to reduce any capital gains when the property is sold.<\/p>\n\n\n\n If you\u2019re not sure download the Investors toolkit<\/a> and check with your registered tax agent. If you pay to be a part of your workplace\u2019s or industry\u2019s union each year, you\u2019re entitled to a tax deduction under D5-Other work related expenses<\/a>. <\/p>\n\n\n\n Running a small business? <\/ins>Did you purchase new or second-hand assets for your business recently? If you have depreciating assets, it\u2019s worth finding out whether you\u2019re eligible for small business concessions<\/a>, such as simplified depreciation rules, the small business income tax offset or immediate deductions for prepaid expenses. Take advantage of these concessions and\/or instant asset write-offs<\/a> to see if they can help reduce your tax bill (some may also save you time).<\/p>\n\n\n\n If your business produces or purchases stock for sale, you\u2019ll likely need to do at least one stocktake at the end of the financial year<\/a> for tax purposes. It\u2019s important to identify any damaged or obsolete stock and write it down or write it off. This exercise will impact the value of the trading stock<\/a> and your profit margins.\u00a0<\/p>\n\n\n\n You\u2019ll also need to consider how to value your trading stock every financial year, as you may be entitled to claim a tax deduction when the opening stock exceeds the closing stock.\u00a0<\/p>\n\n\n\n With many of us working from home,\u00a0we\u2019ve put together a quick guide to deductions for\u00a0home office expenses<\/a>. The fixed rate method allows you to claim 67 cents for every hour you work from home and covers additional running expenses that are often difficult to apportion, such as your phone and internet usage, electricity and gas, stationery, and computer consumables (like printer ink). You can\u2019t claim these items separately if you use the fixed rate method, but your deduction can include working-from-home expenses, which the rate doesn\u2019t cover, such as decline in value of depreciating assets used for working from home. <\/p>\n\n\n\n Using the actual cost method, you work out your deduction by calculating the actual additional expenses you incur when working from home, such as your phone, data and internet expenses. Where you incur running expenses for both private and work purposes, you need to apportion your deduction. You can only claim the work-related portion as a deduction. Whichever method you use, you\u2019ll need to make sure you have the right records, or your deduction may be disallowed. <\/p>\n\n\n\n If you\u2019re a sole trader or in a partnership, you may be able to claim the business-use portion of running expenses (the additional costs of using your home for your business activities) and occupancy expenses (what you pay to own or rent your home). If you operate your business from your home and have a dedicated area set aside as a \u2018place of business\u2019, you may be able to claim occupancy and running expenses. These can include mortgage interest or rent, electricity and phone use. Find out more at: www.ato.gov.au\/homebasedbusiness<\/a> However, you may not get the full main residence exemption if your home is your principal place of business \u2014 for more information visit the ATO website<\/a>. <\/p>\n\n\n\n If you\u2019re an Origin customer, you can download your energy bills using Origin\u2019s MyAccount<\/a>. Check out our tax time help and support<\/a> page to learn how. <\/p>\n\n\n\n As a business owner or an employee, you can claim the cost of your work-related calls (not your entire phone bill). It\u2019s a good idea to keep a logbook of when you use your personal phone, to determine the average percentage of your calls that are work-related. If you have claimed working from home expenses, you cannot claim the same phone expenses twice.<\/p>\n\n\n\n You can claim self-education expenses if there\u2019s a direct connection between the course and your role in your business, or your duties as an employee. You could be entitled to a tax deduction for expenses including the following: <\/p>\n\n\n\n Also, if you\u2019re a small business with an aggregated turnover of less than $50 million, you may be eligible for the small business skills and training boost<\/a>. The boost would give you an additional 20% bonus tax deduction for eligible expenditure incurred on training new and existing employees.<\/p>\n\n\n\n If eligible, you can claim a deduction on expenditure for external training courses delivered to your employees, either in person in Australia or online. The training must be provided by an external training provider registered in Australia. The boost is available until 30 June 2024. <\/p>\n\n\n\n You can\u2019t claim expenditure for training you undertake yourself as a business owner, such as where you are a sole trader, partner in a partnership or independent contractor.<\/a><\/p>\n\n\n\n Business owners who use their personal car for work-related reasons, apart from driving to and from work, can usually claim running costs as a tax deduction<\/a> where a valid logbook has been kept for a representative period of three months. Or you can use the cents per kilometre method for up to 5,000 kilometres. To be eligible, you must be the owner of the car and your travel must be part of your working day. For example: driving between offices, special trips to the post office, bank or moving from one job site to another are considered work-related expenses.<\/p>\n\n\n\n Employees can also claim car expenses<\/a> in similar circumstances.<\/p>\n\n\n\n Our tips are not tax advice and are intended to be general in nature. We recommend you keep a record of all your receipts and working hours as evidence, and that you seek expert advice from a registered tax professional before you lodge your return.<\/p>\n\n\n\n For more information on what you can and can\u2019t claim check the\u202fATO website<\/a>\u202fand for businesses check out\u202fATO website for business<\/a>. <\/p>\n\n\n\n Build your tax and super skills this tax time with Essentials to strengthen your small business.<\/a> A flexible and free online learning platform with courses for small businesses to learn how to get their tax and super basics right. To help you this tax time, and throughout the year. Not too sure where to start? you can always talk to the experts and get the help you need by speaking to the ATO<\/a>, or your registered tax agent, to help get you on your way. <\/p>\n\n\n\nWhat can be considered as a tax deduction?<\/h2>\n\n\n\n
There are many deductions you can claim against work-related expenses that people often forget about when completing their tax return. Certain travel expenses, home office expenses, education and even\u00a0internet<\/a>\u00a0and mobile phone expenses may be tax deductible. Remember, it\u2019s worth speaking with a tax professional to confirm which apply to you (this will help ensure you’re compliant and the cost of tax advice is deductible, too!).\u00a0<\/p>\n\n\n\nFinancial expenses<\/h2>\n\n\n\n
Accounting fees<\/h3>\n\n\n\n
Donations<\/h3>\n\n\n\n
Income protection insurance<\/h3>\n\n\n\n
Investment losses and bad debts <\/h3>\n\n\n\n
Prepaid expenses<\/h3>\n\n\n\n
Rental property expenses<\/h3>\n\n\n\n
<\/del><\/p>\n\n\n\nUnion fees<\/h3>\n\n\n\n
Assets and inventory<\/h2>\n\n\n\n
Review your asset acquisition<\/h3>\n\n\n\n
Take stock of your inventory<\/h3>\n\n\n\n
Work related and operational expenses<\/h2>\n\n\n\n
Home office expenses<\/h3>\n\n\n\n
The way you claim (and the amount you claim) for your home office expenses will depend on the method you use to calculate a working-from-home deduction<\/a>. If you\u2019re eligible to claim a working-from-home deduction, there are two ways you can do this: the fixed rate method or the actual cost method.\u00a0\u00a0<\/p>\n\n\n\nFixed rate method<\/h3>\n\n\n\n
Actual cost method<\/h3>\n\n\n\n
Sole traders and partnerships<\/h3>\n\n\n\n
Mobile phone expenses<\/h3>\n\n\n\n
Education and training expenses<\/h3>\n\n\n\n
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Work-related car expenses<\/h3>\n\n\n\n
Consult the ATO website<\/h2>\n\n\n\n
Get started<\/h2>\n\n\n\n