When it comes to deductions on a tax return most people want to claim as much as they can in order to save on tax. It is important to be aware of what can and cannot be claimed on a tax return. Here are some items that can and cannot be claimed on a tax return:
- If in small business Capital items under $20,000 can be claimed immediately. When a purchase is over this amount, you claim depreciation over a number of years.
- Expenses of a personal nature cannot be written off. (i.e. kids, vacations, personal vehicles). These are items that are for personal use or pleasure; you cannot claim these on your taxes.
- Items or purchases related to business-If you purchase stationary, items for your workplace or use your personal vehicle to travel for business purposes, this is something you can use as a deduction on your tax return.
- If you have purchased a work uniform, you may claim this as a deduction (i.e. scrubs, a shirt with company logo on it, mostly things that you wouldn’t wear outside of work).
- Day-care for children cannot be deducted as they are regarded as domestic or personal expenses..
These are just a few examples of things you can and cannot deduct from your taxes. It is important to research items that are acceptable to claim on your tax and what items are not acceptable to claim. Being informed is the best way to capitalise on the deductions available. The best places to look for these potential deductions are on the ATO website or with your accountant. Also a small tip that often helps to decipher if you can claim an item on your tax returns is by asking yourself; “is this item used to earn my income?” If the answer is yes, the chances are quite high that you may deduct the item from your tax returns!
When in doubt always get advice from your accountant/tax agent.