Tax deductions for the coming financial year
Tax deductions are expenses you have incurred through the financial year for work purposes. Claiming deductions is a great way to decrease your taxable income which is often the reason that individuals receive a tax refund.
In order to effectively claim tax deductions you should be aware of necessary record keeping for claim substantiations as well as what information to provide us with.
Remember, most deductions you are entitled to claim are on expenses that directly relate to earning your income and in order to claim a work-related deduction you must have spent the money yourself and not have been reimbursed. Our team has put together this 2018/2019 Deductions / Evidence table to help you provide us with the necessary and correct information.
A brief list of information that we will request in order to prepare your Income Tax Return is also included below.
Please note that all claims are susceptible to caveats and depend upon your industry, any questions regarding your eligibility for claims can be directed to our office on 08 8523 0133 or at firstname.lastname@example.org.
Information required for your Income Tax Return
To help us prepare your Income Tax Return please provide us with details regarding the following (if applicable) :
- Interest earned on bank accounts including children’s
- Sickness & Accident insurance
- Motor vehicle used for work, between sites, training etc
- Uniforms purchased
- Union fees
- Work from home – number of hours per week on average
- Mobile phone used for work – cost of phone per month and percentage of use for work
- Attendance of training / conferences
- Certified Donations
- Voluntary Superannuation payments
Including the details of the following for businesses (if applicable) :
- Any plant and equipment purchased
- Any loans & leases
- Copy of all bank statements as at the 30th June 2018
- Accounts receivable and accounts payable balance reports.
- Copy of payment summary statement lodged with the ATO
- Closing stock numbers / balance of inventory
- Any other income or expenses not included in software.
2018/2019 Deductions Table
Travel Cents/Km Expenses
Valid claims will use either;
- Estimate of kilometers travelled
- Valid logbook method.
Valid claims will prove the business use of a car by use of either;
- Estimate of kilometers travelled
- Valid logbook method.
Home office Work Related use
Valid claims must retain records including:
- Receipts of equipment & asset purchases
- Diary for any expenses you cannot find evidence for (regardless of amount)
- itemised phone accounts to identify work related calls or similar records such as diary entries
- Lastly you must provide a diary used to calculate what percentage of use is business related on your equipment, home office and phone over a minimum 12 week period.
Cleaning of Work Clothing
Valid claims must be substantiated if both:
- The amount of your claim is greater than $150 and
- Your total claim for work-related expenses exceeds $300.
Gifts and Donations
A valid tax deduction for a gift must meet four conditions:
- The gift must be made to a DGR (deductible gift recipient). Check whether your donation was made to an endorsed DGR at ABN Look-up
- The gift must truly be a gift. A gift is voluntary transfer of money or property where you receive no material benefit or advantage
- The gift must be money or property, which includes financial assets such as shares
- The gift must comply with any relevant gift conditions. For some DGRs, the income tax law adds extra conditions affecting types of deductible gifts they can receive.
For eligible courses you may claim the following expenses:
- accommodation and meals (if away from home overnight)
- computer consumables
- course fees
- decline in value for depreciating assets (cost exceeds $300)
- purchase of equipment or technical instruments costing $300 or less
- equipment repairs
- home office running costs
- internet usage (excluding connection fees)
- parking fees (only for work-related claims)
- phone calls
- student union fees
- student services and amenities fees
- trade, professional, or academic journals
- travel to-and-from place of education (only for work-related claims).
Remember to retain relevant documentation for these expenses in order to substantiate claims.
Tools, equipment and other assets
If you buy tools, equipment or other assets to help earn your income, you can claim a deduction for some or all of the cost.
If the tools are used for both work and private purposes you will need to apportion the amount you claim. If you have a computer that is used for private purposes for half of the time you can only deduct 50% of the cost.
The type of deduction you claim depends on the cost of the asset:
- for items that don’t form part of a set and cost $300 or less, or form part of a set that together cost $300 or less, you can claim an immediate deduction for their cost
- for items that cost more than $300, or that form part of a set that together cost more than $300, you can claim a deduction for their decline in value.
Examples of tools, equipment or assets:
- computers and software
- desks, chairs and lamps
- filing cabinets and bookshelves
- hand tools or power tools
- protective items, such as hard hats, safety glasses, sunscreens and sunglasses
- professional libraries
- safety equipment
- technical instruments.
Sickness & accident income protection insurance
Provide valid tax deductibility letter from fund.
Personal Superannuation Contribution
You might be able to claim a tax deduction for personal contributions you make to your super.
This includes individuals who get their income from:
- salary and wages
- a personal business (ie; self-employed contractors, or freelancers)
- investments (interest, dividends, rent and capital gains)
- government pensions or allowances
- partnership or trust distributions
- foreign income.
If you are unsure of your eligibility please contact us before acting on this information.
A successful claimant will provide their fund with a Notice of intent to claim or vary a deduction for personal super contributions.
The contributions that you claim as a deduction will count towards your concessional contributions cap. You should carefully consider whether to claim a deduction for super contributions as there are super impacts that may arise from this, including whether:
- possible excess in contribution caps
- Division 293 tax may apply to you
- You may wish to split your contributions with your spouse
- It may affect your super co-contribution eligibility.
If your cap is exceeded, you will have to pay extra tax and any excess concessional contributions will count towards your non-concessional contributions cap.
Provide valid confirmation of tax deduction letter from fund.
As this information is designed to cater for an array of clients, businesses and situations, the information is of a general nature only. If anything is of interest to you please do not hesitate to contact our office for further information.
Thank you and enjoy!