8 tax deductions you may be able to claim at tax time

When it’s time to lodge your tax return, you should start thinking about any work-related and income-generating expenses you paid over the financial year.

You may be able to claim some expenses as tax deductions to reduce your taxable income.

In general, to identify expenses that may be acceptable as tax deductions, you should consider:

• Was the expense directly related to your work or income-generating activity?
• Did you spend the money, and you weren’t reimbursed by your employer?
• Do you have an official record of the expense – e.g. receipt or bank statement?

If the expense was for both work and personal use (e.g. home internet), you need to determine the portion of the expense related to your work or income-generating activity.

Here are 8 tax deductions you may be able to claim at tax time:

1. Home office expenses

If you’re working from home and you incurred expenses related to your work, you may be entitled to claim a deduction for home office expenses.

Examples of costs you may have incurred include:

• Phone and Internet expenses
• Computer consumables (e.g. printer paper and ink) and stationery
• Home office equipment (e.g. computers, phones, printers, furniture and furnishings)

Keep in mind that most people aren’t able to claim:

• Home expenses, like mortgage interest, rent and rates
• Costs of general household items, like coffee, tea and milk

There are certain criteria you should consider before you claim an amount for home office expenses in your tax return. These include which of the two calculation methods is acceptable and most appropriate to your circumstances. Some things to think about include:

• whether you can claim the revised fixed rate method of 67 cents per hour (available from 1 July 2022), 
• rather than use the revised fixed rate method, whether it’s more appropriate for you to use the actual cost method ,
• the different records you need to keep, which can depend on the method you choose, and
• if you have incurred costs on home office equipment, whether that cost gives rise to an immediate deduction in the year you buy it, or a decline in value (also known as depreciation) in the current and future years.

You should consult the ATO website, or speak to your accountant or tax professional about the rules before making a claim – in particular, the eligibility criteria and the records required to substantiate the hours you worked from home or expenses you incurred. More information is available on the ATO website:

• The revised fixed rate method;
• The actual cost method;
• General information about working from home expenses.

2. Vehicle and travel expenses

While you generally can’t claim expenses for getting to and from your regular workplace, there are some work-related vehicle and travel expenses you may be able to claim.

These may include:

• Where your work requires you to attend multiple workplaces or locations
• Car expenses where you need your car to perform your work duties
• Accommodation expenses when you’re required to travel for work

You can find out more about vehicle and travel expenses you can claim on the ATO website.

3. Clothing, laundry and dry-cleaning

If you bought occupation-specific clothing, protective clothing or work uniforms specifically related to your job, you may be able to claim these costs, as well as related cleaning costs, as work-related expenses.

However, you’re unlikely to be able to claim costs for conventional clothing or non-compulsory work uniforms.

You can find out more about clothing, laundry and dry-cleaning expenses you can claim at the ATO website.

4. Education

If your studies were work-related and you enrolled in an eligible course, you may be able to claim a tax deduction.

You can find out more about course expenses you can claim at the ATO website.

5. Industry-related deductions

You may also be able to claim tax deductions for work-related expenses specifically related to your occupation and industry.

You can check the list of occupations and industries on the ATO website to see what industry-related tax deductions you can claim.

6. Other work-related expenses

There are other work-related expenses you may be able to claim as tax-deductible expenses, depending on your work and individual circumstances. Expenses to consider include:

• Books, periodicals and digital information subscriptions
• Safety goggles and protective sunglasses
• Overtime meals
• Union fees, subscriptions to associations and bargaining agents fees

7. Gifts and donations

If you gave a gift or donation to an organisation (e.g. your favourite charity), you may be able to claim a tax deduction. However, there are specific rules that apply.  

Generally, you can claim any donation you made above $2 if the donation was made to an organisation that has the status of a ‘deductible gift recipient’. As not all charities have this status, you can look up the organisation here to check for ‘deductible gift recipient’ status.

For gifts, different rules apply depending on the type of gift.

You can find out more about gifts and donations you can claim at the ATO website.

8. Investment income

You may be able to claim investment income tax deductions if you’ve received:

• Interest payments on your savings
• Dividends from your investments in shares
• Rental payments from an investment property
• Another type of investment income

If you’ve received any of these, you could be entitled to claim for costs related to this income, such as interest charged on money borrowed to buy stocks or rental properties.

You may also be able to claim money you paid for investment advice.

You can find out more about income-generating deductions you can claim at the ATO website.

Once you’ve lodged your tax return, make sure you keep all your records of expenses. The ATO may ask you to provide evidence to support any claims you make.

You can find out more about the tax deductions you can claim at the ATO website.