Five Tax Deductions You'll Probably Forget To Claim

Another tax year is about to end and we'll have until 31 October to get our tax returns sorted. Ideally, all our admin efforts will be rewarded with a nice little sum but only if you remember to claim the expenses you're entitled to.

Many of us less-savvy taxpayers start to realise our expense-tracking throughout the financial year has been, ahem, less than excellent and a lot of work will need to go into figuring out how much we can legally claim back from the Australian Tax Office (ATO).

When this happens, it feels easier to just forego claiming those extra deductions you're probably entitled to but never got around to actually calculating. However, with a little forward thinking and record-keeping, you can save yourself hundreds of dollars each year during your tax return.

To help you out, eTax offered some commonly forgotten deductions many of you might actually be eligible for and luckily, you still have a bit of time to get yourself sorted. So, whip out those dusty journals and start writing everything down.

First up, tax agents

Tax agents are an extra expense at tax time and while it will eat into your precious returns, it's an expense you can claim back the following year. What's also great about using them is they're the experts in the field and can offer advice about other areas you could potentially be missing out on.

To do so, you'll just need to find the section titled "Cost of Managing Tax Affairs" and pop in the amount you paid for your tax agent. Just remember to keep records of their service and cost in case the ATO want to double check your claim.

Mobile phone bills

Most, who aren't lucky enough to be given a work phone, will use their mobile phone at some stage for work-related purposes. While keeping note of every time you use your personal phone for work reasons is arduous and unrealistic, eTax recommends you keep a journal for one month and calculate the cost across a year.

For example, if you estimate around 20 per cent of your data and call credit usage is work-related across one month, you can claim 20 per cent of monthly bill and then multiply it by 12 months.

See? Not so hard after all.

Working from home

This year many of us will have experienced working from home thanks to coronavirus and that's a deduction you'll be able to claim too. This year you'll have two options to claim working from home expenses — the traditional method and the coronavirus-related shortcut method.

The traditional method means you'll have to calculate your internet, phone and electricity bills separately and then adding them up as a total. The ATO recommends using a fixed rate of 45 cents per hour for heating, cooling and lighting usage while you'll have to work out the percentage of your internet and phone costs you can attribute to work.

The shortcut method will instead let you claim 80 cents for each hour worked between 1 March 2020 until at least 30 June 2020.

Car-related costs

Depending on the nature of your work, you might need to use your own car for transportation during work hours.

Sadly, you cannot claim this for any travel from your home and your workplace but if you're needing to travel between offices or to visit certain sites during work hours, you just may be able to land that sweet tax deduction.

To make things a bit less daunting, the ATO provides a handy calculator to add up what you can actually claim.

Professional memberships

Finally, if you're a member of any professional association or union related to your field of work, you might be able to claim a deduction. The rules on this are quite specific so you'll want to read up about it to make sure you get your share.

While there are many myths out there about what you can safely claim without any evidence, it's important to remember your meticulous record-keeping is what's going to stop you living off borrowed tax money. The last thing you want to deal with is the tax man knocking at your door with a handful of questions about any shady returns.

[via eTax Accountants]

This article has been updated since its original publication.