5 tax deductions that are often missed

26 Oct

There are a whole bunch of tax deductions we’re all familiar with. However, here are 5 tax deductions that are often missed.

1. Rental property expenses

Most rental property owners are aware they can claim deductions for the mortgage interest. Here are a few more deductions you may be able to claim.

Gardening and lawn mowing,
bank fees,
pest control,
security patrol fees,
bookkeeping/secretarial fees,
maintenance and repairs,
end of lease cleaning costs and
letting agent fees, including marketing.

Additionally, don't forget to maximise your capital works deductions, essentially the depreciation on the building itself.

2. Mobile phone expenses

If you use your personal mobile phone for work, whether to make or receive calls, you can claim the cost of these calls as a deduction. However, you can only claim business-related calls. To determine the proportion of business and personal use accurately, maintain a diary for at least four weeks. For instance, if you have a $100 monthly mobile phone plan and your diary indicates that 25% of your calls are work-related, you can claim a deduction for $25 per month or $300 per year.

Likewise, if you use your home internet service to handle work-related matters, such as responding to work emails, you can also claim a portion of those costs. Remember to keep a detailed diary to accurately calculate the proportion attributable to work-related use.

3. Handbags

Thoughtful consideration is needed here. The handbag must be suitable for work purposes and actually used for work, like carrying work papers or a laptop computer. While claiming a new Gucci bag might be a stretch, a more modest bag, exclusively used for work, should be okay.

4. Social functions

As a general rule, the ATO won't allow you to claim tax deductions for a night out. However, there are exceptions when attending such functions is integral to your work. For example, if a journalist attends an event they will later report on through their media outlet, a deduction can be claimed in that instance.

5. Income protection insurance

If you pay for insurance premiums to safeguard against loss of income, those amounts are tax-deductible. However, it's essential to note that this doesn't apply to life insurance, critical care insurance, or trauma insurance. Furthermore, policies paid for using your superannuation contributions are also excluded from tax deductions.

For more tax tips simply contact me at paul@congdonfuzi.com.au

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