eTax and Allowable Deductions Checklist

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Etax and Allowable Deductions

The following tax time tips and check lists will help you prepare your annual etax return and calculate your tax refund.

See this post with tips, calculators and checklists to help you prepare your eTax Return (and get a better refund) with less hassle summary of Assessable income.

Allowable Deductions is where all the action is since they reduce the “taxable” income, the amount on which most tax calculations are made. Whether you are using etax, a local tax agent or other online tax return preparation service, deductions are a very important component of the annual tax return. The more deductions the bigger the tax refund!
Allowable deductions can be actual or deemed. Some you need receipts for and some you don’t. It’s complicated so it pays to use experienced professional support. Just like a builder knows how to build a house, an experienced professional knows what to claim against which income.


Work Related Car Expenses 

The key here is “Work Related”. Whilst certain travel to and from work is allowable, it is generally not allowable unless you transport “bulky” or “heavy” tools/equipment with you AND “...you can not leave them at the work place”.

Some years ago I saw an example of where travel from home to work was incorrectly claimed. A miss guided accountant claimed a deduction for travel between home and work for meat workers based on the premise that transport of knives was illegal on public transport. The ATO didn't agree and all the accountant's meat worker clients received adjustment notices. Understandably these meat worker clients were not happy and none returned to that practice the following year. See these posts for more detail:
Work Related Overnight Travel

Where applicable these include tolls, parking and costs of meals and accommodation while working away from home. These types of expenses are common for some construction/mine workers and long distance truck drivers. In some cases these workers also receive an “assessable” allowance. The ATO sets out some guidelines on such claims - see my posts:
Work Related Clothing and Laundry

This is where most uniforms, occupation specific and safety clothing is claimed. Examples include items that form part of a corporate wardrobe (eg bank officer); traditional uniforms (eg nurses uniforms or hi-vis clothing or painters’ white clothing); or overalls for trades people. Laundry and steel capped boots are allowable where appropriate.

See this post for a checklist of Allowable Uniform and Work clothes Deductions.

Self Education Expenses

To be an allowable expense, the study must relate either directly to your work activity (eg. child care study while working in child care industry) or associated with future income increases.See this post on claiming Self Education expenses.

Other Work Related Expenses

This is where most deductions are claimed. They must relate to your your work and include items like tools, computer equipment, stationery, uniforms, union fees, phone, sun glasses for truck drivers etc, some work related meals where a meal allowance has been received, some licence renewals and many more.

You can get specific answers on tax deductions relating to your occupation or for a quick checklist of work related tax deductions see:



Depreciation

If you purchase capital items over $1000 the must be depreciated. There are two primary depreciation types - standard rate applied to a reducing balance (diminishing value method) or pooled, where an item is added to a pool and which may attract a higher depreciation rate than standard allowances. See this post for a checklist of Low Value Pool Depreciation deductions.

Investment Related Expenses

Where interest or dividend income is derived, expenses such as course fees, workshops, books and journals, interest payments associated with the investment portfolio (eg margin lending) can be claimed here. Where the sum of claims is over $4999 a schedule detailing the claims must be completed.

Donations

To be an allowable deduction the donation must be made to a registered charity. See this ATO list of registered charities.

Cost of Managing Tax Affairs

This includes tax agent fees actually “paid” during the year. For example, a fee paid relating to a 2013 tax return would be paid and claimed in the 2014 year. This item also includes interest payments made to the ATO.

This is a very brief explanation of allowable deductions to include in your etax return or other online tax return application.

E-tax Return

See these posts with tips, calculators and checklists to help you prepare your eTax Return (and get a better refund) with less hassle:
For help with your eTax return see our eTax Return Checklist.

Web Based Tax Return App:

A benefit of using eZtax, our web based tax return app, is we have the genuine online tools, knowledge and experience to get the best tax refund for our clients, making it easy to complete your annual tax return online.

Our Web Based Tax Return App will step you through all the necessary questions to increase your  tax refund and take into account all relevant tax deductions and tax offsets. Try it now. Its FREE to get started!

Copyright 2014. My Tax Zone.