Understanding Potential Tax Deductions
Tax season is a time when individuals across the country turn their attention to their financial affairs, ensuring compliance with tax laws while seeking to minimise their tax burden.
While many Australians may be familiar with common tax deductions such as work-related expenses and charitable donations, there are lesser-known deductions that could significantly impact your tax return.
Claiming Rental Property Depreciation:
- If you own a rental property, you may be eligible to claim depreciation on the building and its fixtures and fittings. Depreciation is a tax deduction that allows you to account for the wear and tear of assets over time. Engaging a quantity surveyor to prepare a depreciation schedule can help identify eligible deductions, potentially resulting in significant tax savings.
Deducting Car Expenses for Rental Property Inspections
- If you own a rental property and use your car to travel to and from inspections, maintenance visits, or to collect rent, you may be able to claim car expenses as a tax deduction. This includes costs such as fuel, maintenance, registration, and insurance. Keeping accurate records of your travel expenses throughout the year can help substantiate your claims come tax time.
Claiming Home Office Expenses
- With the rise of remote work, many Australians now work from home either part-time or full-time. If you use a dedicated space in your home for work-related activities, you may be eligible to claim home office expenses as a tax deduction. This can include a portion of your utilities, internet, phone bills, and even depreciation on home office equipment. Keep detailed records of your expenses and calculate the proportion of your home used for work to maximise your deduction. Remember that a change was introduced to work-from-home related deductions last year – if you require more information, consult your tax agent for assistance.
Deducting Sun Protection Expenses
- Australia’s harsh climate means that sun protection is essential for outdoor workers. If your job requires you to work outdoors and you incur expenses for sun protection items such as sunscreen, hats, sunglasses, and protective clothing (as in, this is not provided by your employer), you may be able to claim these expenses as a tax deduction. Remember to keep receipts for all sun protection purchases throughout the year in case you are eligible to claim them.
Claiming Tax Advice Fees
- Seeking professional tax advice can be invaluable in navigating the complexities of the tax system and maximizing your returns. Fortunately, the fees you pay for tax advice, including the preparation of your tax return, are generally tax-deductible. Whether you engage an accountant, tax agent, or financial advisor, keep records of the fees paid to claim this deduction.
Understanding and maximising your tax deductions can lead to significant savings come tax time.
By exploring lesser-known deductions such as rental property depreciation, car expenses for rental property inspections, home office expenses, sun protection expenses, and tax advice fees, you can ensure you’re not leaving money on the table.
Keep accurate records of your expenses throughout the year, and consider seeking professional advice to optimise your tax position. With careful planning and attention to detail, you can maximise your tax deductions and enhance your financial well-being.
As with everything, feel free to consult your tax advisor before committing to making any decisions.
