Five deductions you can’t claim on your taxes
Everyone wants to maximise their tax return and claim as many deductions as possible. While there are plenty of legitimate deductions available, there are some you should be careful of. The tax agents in our Caulfield office can help unravel the complexity for you.
The tax office is always scrutinising deductions and looking for inappropriate ones. There are a few common ones the tax office sees over and over. This list includes some common mistakes and items that are not deductible, even when they seem like they should be.
A uniform must be a specific design and include a company logo or is essential to your safety, or sets apart your unique occupation. Even if your boss requires you to wear a suit, sorry – that is not a uniform and laundry costs associated cannot be claimed.
The cost of health insurance is not deductable from your taxable income. If you do not pay for private health insurance you may also be slapped with a hefty tax penalty as well. It is important to choose the right health plan and at this time of year you may find some extra discounts as well.
Unlimited Phone Plans
If you use your personal mobile phone for business calls, remember you cannot deduct the entire monthly plan fee. You will need to keep a log of calls and you can only claim a percentage or proportion that relates to your business use.
Charity Donations That Aren’t Gifts
You can claim donations to charity organisations that are purely gifts and you do not receive anything in return. The tax office makes it clear that if you receive a raffle ticket, a chocolate bar, or a pen – then it’s not a donation and it cannot be deducted.
While you claim some self-education expenses – they must be directly related or have a “sufficient connection” to your current employment. Just because you want to learn pottery on the weekend, it’s not something you can deduct. (Unless you are a potter by trade)
This is not a full list of course, but hopefully this information will make your deductions clearer and help you avoid these common mistakes at tax time. Of course if you have any questions about these deductions, please give our office a call. Our professional accountants & tax agents in Caulfield are here to help you with any of your small business or individual tax needs.
Hillyer Riches Management Pty Ltd is a Corporate Authorised Representative (No 466483) of Capstone Financial Planning Pty Ltd. ABN 24 093 733 969. AFSL / ACL No. 223135.This document contains general advice only and is not personal financial or investment advice. Also, changes in legislation may occur frequently. We recommend that our formal advice be obtained before acting on the basis of this information