Life Admin Hub  ›  Tax  ›  A Quick and Easy Guide to Tax Deductions in Australia

A Quick and Easy Guide to Tax Deductions in Australia

Tax deductions — you might know them as things you claim on your Tax Return to increase the amount of money you’ll get back in your tax refund. And you wouldn’t be wrong. 

The important question here is: what can you claim in your Tax Return? In order to boost your tax refund, you’ll first need to know just what exactly is a tax deduction. 

So, stick around and stay awhile, as we tell you everything you need to know about tax deductions in Australia, things you can claim on tax, and the easiest way to boost your tax refund. 

What are tax deductions? 

A tax deduction is something you purchased at your own expense, generally work-related, which can be included in your Tax Return in order to reduce the amount of your income that is subjected to tax. 

In other words, you can reduce your taxable income and increase your tax refund. 

Typical tax deductions include work-related expenses such as tools, self-education expenses, uniforms, vehicle travel for work, and as of more recently work from home expenses. 

Since COVID-19, there has been an increase in people working from home, this means people can claim on home office expenses including, mobile phone use, home internet, home office supplies, among other things, as tax deductions. 

General other tax deductible items also include charity donations, certain health insurance policies, interest paid on investments and rental property expenses. We’ll explore other things you can claim on tax in just a moment. 

But first, let’s take a look at how tax deductions in Australia work.

How do tax deductions work?

It’s complicated, it’s not simple. You’ve got a whole list-full. And to be able to claim everything — everything work related and tax deductible, we’ve got you covered. 

Generally speaking, to be able to claim work related deductions, the ATO requires you to meet the following criteria:

  • You must have spent the money yourself
  • You must not have been reimbursed 
  • You must have a record to prove it (usually a receipt)
  • The expense must be related to your job (earning an income)
  • If the expense was for work and personal, you can only claim a portion of the costs related to work

If you use One Click Life online Tax Return, the platform will automatically populate with deductions you can claim. You can also get live help from a qualified accountant, who’s there to help you maximise your tax refund. 

Does this mean I get all the money back if I buy something that’s tax deductible? 

Unfortunately, you won’t get ALL of your money back, but you will get a percentage. In short, your taxable income is reduced by the amount you spend, this means you will pay less tax on your total income, and your tax refund goes up. 

Our numbers geeks break it down below.

How to calculate tax deductions?

Using the in-built tax refund calculator inside One Click Life’s Tax Return app is the quickest and easiest way to accurately calculate and get your tax refund estimate. It’s so easy you could do it from your couch in minutes. 

Click Here for more info on how One Click Life’s Tax Calculator works.

Finally, it’s the part you’ve all been waiting for — what can I claim on tax 2021 and get the best possible refund? 

Commonly claimed tax deductibles to maximise your 2021 tax refund 

Ranked #1 for 2021: Working from home tax deductions

With an increase in people working from home and many people claiming working from home expenses, the ATO has introduced two methods to simplify working from home tax deductions. If you have been working from home the past year or sometimes work from home, check out the following articles to see what you can claim.

Other tax deductible items

Uniforms and laundry expenses

There are many different jobs that require a certain type of attire or compulsory uniform. Did you know that most of these items could potentially be counted as a deductible expense? Find out what uniform and laundry expenses you can claim.

Work-related vehicle and travel expenses

There are several conditions for you to be able to claim Motor Vehicle Expenses, this includes owning the vehicle you are claiming expenses for. Pro tip is to always keep record of your travel expenses, this will make your life much easier come tax time. Click the link below for a more in depth guide on how to claim vehicle expenses.

Mobile phone usage

If you use your own phone for work-related calls, you can claim a deduction provided you paid for these costs and have kept records to support your claim. If you use your phone for both personal and business, you’ll need to work out the percentage related to your work use. 

The simplest way is to review your itemised phone bill and determine what percentage was used for work during a 4 week period and apply that to the rest of the year. 

Self-education expenses

Self-education expenses are those related to courses or workshops provided by an educational institution such as a college or university, or other training providers. To be eligible for a tax deduction, you will need to have taken this course for a formal qualification related to your current profession, business or trade. Find out what tax deductible self-education expense you can claim on.

Charity donations

If the charity is registered by the ATO as a Deductible Gift Recipient (DGR), then these donations made will be tax deductible. 

To check if a charity or church is a registered DGR, simply look up the name of the charity at http://www.abn.business.gov.au/AdvancedSearch.aspx

Look out for a sub heading that says ‘Deductible gift recipient status’. It should say Deductible Gift Recipient (DGR) from [date]. This means all donations are tax deductible donations. 

If it says ‘Not entitled to receive tax deductible gifts’ this means your donation will not be tax deductible. 

Interest and investments

You can claim deductions for expenses incurred from earning interest, dividends or other types of investment income. This can include things such as account keeping fees. For these types of deductions, it’s best to speak to a qualified accountant. Shares and dividends start to get quite complicated and tricky if money borrowed was used for private and income producing purposes. 

Job specific tax deduction tips

Every job has a different set of tax deductible expenses. Click on the guide which relates to your job for specific tax work related expenses you can claim on Tax Return:

Quick and easy Tax Returns with live help from a qualified accountant 

Remember, you don’t have to face the ATO alone. At One Click Life, we have made doing your online Tax Return convenient, easy and stress-free. There’s no messy paperwork or confusing tax lingo. We’re on your side to help you get a better tax refund while making sure you’re in the good books with the ATO, so you can:

Spend less time on tax

Your time is important. Our simple and convenient process only takes a couple of minutes, so you can get back to doing what you love.

Maximise your refund

Get deduction tips from our friendly numbers geeks and boost your Tax Return.

Enjoy financial freedom

We’ll take care of your taxes, so you can focus more on what matters most in life — going on adventures. 

Feel more confident

We’re on your side and help you reduce the risk of being audited, so you don’t have to face the ATO alone. 

Give back to the community

Always wish you could do more? Feel good about doing your taxes with a special gift that you can keep, or donate with our Random Acts of Kindness program.

All your information protected

Verified & secured by Microsoft, your information is safe and encrypted with Australia’s first and only, advanced security system that’s anti-fraud.

Ready to lodge your Tax Return?

Already have an account? Click here to sign in.