Tax time is upon us and you may be thinking about what tax deductions you can claim in 2024. You should deduct as much as you possibly can legally, but you may be unaware of what you are permitted to deduct on your tax return. Australians lose thousands of dollars every year as they do not understand how to maximise their online tax refunds with tax deductions. Don’t be one of those people!
If you are unsure about the deductions you can claim in 2024, don’t worry. In this blog, we will talk about what makes an item tax deductible and the 8 most popular tax deductions that people frequently overlook when filling out their tax returns.
What Makes an Item Tax Deductible in 2024?
There are 3 requirements that must be met for an item to be recognised as a tax deduction by the ATO. These requirements include:
- It has to be a work-related expense
- You need to have spent money on it yourself, and not be reimbursed
- You need to have proof of purchase
If you’re unsure if something is work-related, or you partially use something for personal and work use, you should contact a tax accountant like One Click Life to determine what you can deduct.
8 Most Common Tax Deductions in 2024
We have provided a list of 8 popular deductions you can claim on your tax return in the 2022/2023 financial year. The One Click Life platform auto-populates common deductions for your specific job, making it easy to recognise your expenses.
1. Working From Home Expenses
Working from home has become popular in recent years and with it comes working from home tax deductions. You can claim working-from-home expenses using a fixed rate of 67 cents per hour worked at home or use the actual cost method that involves tracking all your incurred expenses.
Read our blog for a more in-depth guide on working from home tax deductions.
2. Mobile Phone Expenses
If you are not supplied a work phone by your employer and you use your personal phone for work purposes, you can claim mobile phone tax deductions. You can only claim the proportion of phone use used for work. For example, if you used your phone 20% of the time for work purposes, you could only claim 20% of your phone expenses as tax deductions. You cannot claim mobile phone expenses if you claim the fixed rate working from home expense.
Want to know more about mobile phone expenses? Check out our blog on mobile phone tax deductions.
3. Internet Expenses
Your home internet can be claimed as a deduction like your phone expenses. You can only claim the proportion of your work-related use. It is worth noting that internet expenses cannot be claimed if you claim the 67 cents fixed rate working from home expense.
4. Computer/Laptop Expenses
If you purchase a computer for work purposes, you may deduct it from your taxes as a work-related expense. If you use your computer for work and personal purposes, you may deduct the work-related proportion. You may also deduct the cost of depreciation for items like computers from your taxes, meaning you can claim even more come tax time.
5. Union Fees and Expenses
Union fees are one of the most overlooked expenses as tax deductions. So, if you are a member of a union, remember to add the fees to your deduction list or inform your accountant of the expense. Joining a union is beneficial for lightening your tax load.
6. Work/Industry Related Expenses
All costs you incurred throughout the financial year for work are tax deductible. Some work-related expenses include:
- Laundry
- Uniform
- Equipment
- Supplies
- Travel and accommodation
- Magazine and other subscription services
To see your industry-specific deductions, check out our tax deduction checklists.
7. Car Expenses
You cannot claim car expenses for your commute to and from work. However, you can claim car expenses for work-related expenses like travelling to a client’s house. Additionally, you can claim car expenses for carrying heavy equipment that is essential to your job.
Car expenses can be claimed using the cents per kilometre method or the logbook method. The cents per kilometre method allows you to claim 78 cents per kilometre travelled for work. The logbook method involves tracking the proportion of work-related use for your car and claiming the costs associated.
For a deeper look into what car expenses, you can and can’t claim, read our “Claiming vehicle expenses” article.
8. Tax Agent Expenses
Tax agent fees are tax deductible. That’s right, when you lodge your tax return, the fees you pay are tax deductible. If you are using an online tax agent like One Click Life, this expense will automatically be added for you.
Can’t find all your receipts? Do not stress!
One Click Life uses SAM (Simple Accounting Manager) to make your life easier.
SAM securely connects to your bank account and retrieves a list of all required deductions to optimise your tax return. SAM has access to the four major banks as well as more than 100 other financial organisations, making it easier than ever to deduct your expenses.
Quick Check 2024 Tax Calculations
One Click Life has a number of tax calculators to help you perform a quick check of your tax position. Check out the link for each tax calculator below:
Who Will Prepare Your Tax Return for You?
One Click Life is the only solution you need to ensure that you get the most out of your tax deductions. One Click Life offers you a platform to view all your life admin in a single place.
Let us take care of your life admin as it may be laborious, and easy to mess up. You can make sure you’re spending your time on the activities you enjoy by letting us handle it for you! When it comes to online tax returns in Australia, we ensure you will maximise your tax refund.