The end of the financial year is just 10 days away, and that means it’s times to reduce your taxable income ASAP!

Yep, with EOFY deals going off, you’ve finally got an excuse to make purchases that you’ve been holding off on…as long as you can get juicy tax deductions on them.

It might be work from home expenses, work-related education, travel expenses - believe it or not, there’s a lot you can claim back as a tax deduction.

And with the Stage-Three tax returns coming into play on July 1, most Australians’ marginal tax rates will drop, meaning you’ll get more bang for buck for deductions you claim in this financial year.

A quick refresher on tax deductions

…just to make sure we’re all on the same page.

A tax deduction isn’t free money in your pocket (as much as we wish it was). Instead, it’s something that helps reduce your taxable income, and therefore the tax that you owe the ATO.

The general rule is, you can claim a tax deduction on something where:

• You’ve spent your own money on something that directly relates to you earning an income
• You weren’t reimbursed for the money you spent
• You have some record of the spending ie. a receipt

And to make the process of pulling together your eligible deductions a pain-free and easy-breezy process for you, we’ve pulled together the ultimate check-list of tax deductions you should claim (if they apply).

1. Work from home expenses

If you’re working from home, you may be able to claim your home-office expenses as tax deductions.

Think: phone and internet expenses, stationary, home office technology like computers, monitors or desk chairs.

So if you need to update your work-from-home set up, or stock up on new printer paper and pens, now is the time to do so, if you want to claim the deduction in this financial year.

If you buy items for work that cost $300 or less eg. some stationary, you can claim the full amount as a single deduction in one tax return.

Bear in mind that if you’re planning to spend a bit extra, say on a new laptop or desk, you might get a good bargain on EOFY sales, but you won’t be able to claim it all in this financial year.

That’s because the ATO expects you to use that item across a number of years, and therefore deduct the amount by which it depreciates over time.

So if you’re wracking your brain trying to think of what work-from-home purchases might be worth your while before the EOFY, here’s some ideas for you:

• Laptop (although if it’s more than $300, you won’t be able to claim it in this year only)
• Phone for work purposes
• Wireless routers/Wi-Fi mesh and extenders
• Printer and cartridge
• Stationary, notebooks
• Office desk and chair
• Office cleaning expenses
• Repairs to home office furniture and fittings
• Headphones or earphones (You’ll need to justify you use them for work purposes ie. taking calls. Of course, we would all want to claim AirPod Max’s to listen to sick beats in the office if we could.)

And if you don’t need anything new, flick through your old bank statements to look for small incidental work-related purchases. They might seem negligible, but a couple of $20 purchases here and there can add up quickly and help boost your deductions.

1. Subscriptions

Relevant subscriptions that you use as part of your job can be claimed as tax deductions. 

The cost of subscriptions like antivirus software, or journals or magazines you use for work can be claimed. 

Butttt they have to be directly related to your work. The ATO has seen its fair share of sneaky tricks, like retail employees claiming Netflix and video game subscriptions as deductions, claiming to be “entertainment consultants”. 

2. Charitable donations

Any donations you make to a registered charity for $2 or more will be tax deductible, as long as you have your receipt. For the nitty gritty details on how tax deductions for donations work, check out our article on the topic, here.

3. Your handbag

Need a new bag for work? No need to think twice when you can claim it back as a tax deduction.

You need to use your bag specifically for work purposes ie. to carry your laptop, iPad, stationary etc.

Keep in mind, it’s easy to get carried away with this one. Your handbag needs to actually be used for work purposes to be eligible. 

A designer bag you sometimes take into the office might be hard to convince the ATO of, but a standard handbag or briefcase for work will be claimable.

1. A tax-deductible super contribution

What better way to reduce your taxable income than by investing in your future? 

When you make a personal (after-tax) contribution to your super, you’ve paid tax on that income at your marginal tax rate. Usually your marginal tax rate is higher than the rate at which super is taxed - 15%.

A tax deduction on your after-tax super contribution allows you to claim back the amount you’ve contributed. And your contributions are treated as pre-tax contributions in your superfund and taxed at 15%.

That way you’re receiving the same tax benefit you would if you had made a pre-tax super contribution ie. salary sacrifice.

To claim the deduction, you’ll need to fill the ‘intent to claim form’ and lodge it with your superfund on either 30 June or before you lodge your tax return.

To learn more about how tax-deductible super contributions work, and see some worked examples, head over to the Maximising Your Super Academy.