The Top 5 Most Missed Tax Deductions: Don’t Leave Money on the Table!
Tax time can suck, and it's easy to overlook valuable deductions that could save you money. To help you out, we'll highlight the top 5 most commonly missed tax deductions, highlight some common traps and provide practical tips to maximise your deductions.
Contents
- Home Office Expenses
- Self-Education Expenses
- Union Fees and Subscriptions
- Work-Related Clothing and Laundry
- Investment Property Expenses
1. Home Office Expenses
With the rise of remote working, many are entitled to claim home office expenses. This includes a portion of your electricity, internet, and even the depreciation of office furniture and equipment as tax deductions.
Example: If you work from home two days a week, you can claim a portion of your home office expenses. For instance, if your electricity bill is $1,200 a year and you use 10% of your home for work purposes, you can claim $120 as a tax deduction.
Trap: Make sure to keep a detailed log of your work hours and the space you use exclusively for work to substantiate your claim.
2. Self-Education Expenses
If you’re undertaking a course that directly relates to your current job, you can claim various expenses, including tuition fees, textbooks, and even travel costs to and from your place of education as tax deductions.
Example: Jenny is a marketing manager studying a part-time course in digital marketing. She can claim her course fees, the cost of textbooks, and travel expenses to attend classes as deductions.
Trap: The course must have a direct connection to your current employment. Courses to get a new job or change careers generally aren’t deductible.
3. Union Fees and Subscriptions
Union fees and subscriptions to professional associations related to your work are often overlooked but are fully deductible.
Example: Terry is a nurse and pays $500 a year in union fees. He can claim the full $500 as a tax deduction on his tax return.
Trap: Ensure that the subscriptions are directly related to your profession. Personal club memberships are not tax deductible.
4. Work-Related Clothing and Laundry
You can claim the cost of buying and cleaning occupation-specific clothing, protective clothing, and unique uniforms.
Example: Susan is a chef who spends $300 on chef's uniforms and $200 on laundry services throughout the year. She can claim the total $500 as a tax deduction.
Trap: Ordinary clothes, even if you only wear them to work, are not tax deductible. The clothing must be specific to your job.
5. Investment Property Expenses
If you own an investment property, you can claim a range of expenses, including interest on loans, property management fees, and even depreciation on the property itself.
Example: Michael owns a rental property and pays $10,000 in interest on his mortgage, $1,200 in property management fees, and claims $2,000 in depreciation. He can claim these expenses, totalling $13,200, as tax deductions.
Trap: Make sure the property is genuinely available for rent. If it’s only available for part of the year, you can only claim tax expenses for that period.
Conclusion
By keeping an eye on these commonly missed deductions, you can maximise your tax refund and ensure you’re not paying more tax than necessary. Always keep detailed records and receipts to substantiate your claims, and consider consulting with a Gotax professional to ensure you’re taking full advantage of all available tax deductions.
Pro Tip
Choice Piece of Tax Advice: Always stay organised throughout the year. Keep a dedicated folder for all your receipts and expenses, or use a digital app (Deduction Grabber) to track your deductions in real-time. This habit will save you a lot of stress and ensure you don’t miss out on any valuable deductions when tax time rolls around.
Scan me to comprehensively record your receipts and logs each tax year.
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