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Commonly Overlooked Tax Deductions for Aussies
As Australians prepare to submit their tax returns next month, many may unknowingly leave behind tax deductions that could save them hundreds or even thousands of dollars. Recent research by Xero reveals that over 51% of Australians are unsure about what they can claim on their taxes, despite 58% having made purchases eligible for tax deductions in the past financial year. Tax expert Kiki, known for her online platform Tax Tips and Tricks, has identified five frequently missed tax deductions that can help maximise your refund.
1. Subscriptions
Many taxpayers overlook work-related subscriptions. Costs for professional subscriptions, such as those for industry journals or platforms like LinkedIn Premium, can be claimed. Kiki noted that services used for work, like ChatGPT, may also be tax-deductible, provided they are not supplied by an employer. However, personal subscriptions (like Netflix) are typically not deductible unless directly related to your job.
2. Rental Property Expenses
Owners of rental properties may be missing out on deductions for management fees, letting fees, and depreciation reports. Kiki advises obtaining a depreciation report before the financial year ends, as the cost of obtaining such a report is also tax-deductible. Additionally, expenses related to repairs and maintenance, pest control, end-of-lease cleaning, and finance fees for the property can contribute to your deduction claims.
3. Fees for Professional Tax Assistance
Hiring a professional to handle your tax return can also provide a tax deduction. Costs incurred for engaging a tax accountant or adviser are deductible in the year the payment is made. Therefore, any fees paid from July 2024 to June 2025 can be claimed in the current tax return, potentially bringing back a significant refund based on your marginal tax rate.
4. Income Protection Insurance
Income protection insurance premiums are often forgotten as a tax deduction, but they can be claimed if paid personally and not through a superannuation fund. Kiki clarified that if the policy is under your super fund, you cannot claim the premiums as your fund is paying them instead. With an average annual cost of around $921 for such insurance, you could see an increase of approximately $295 in your tax refund at the 32% tax rate.
5. Voluntary Super Contributions
Voluntary contributions made to your superannuation fund before June 30 are tax-deductible, provided a notice of intent is submitted. Keep in mind the concessional contributions cap of $30,000, inclusive of employer contributions. For someone aged between 45 and 49 making an average voluntary contribution of $1,500, it could lead to a tax refund of about $480 after accounting for the 15% contributions tax.
By optimally leveraging these deductions, Australians could significantly increase their potential tax refunds. For instance, combining claims for professional tax assistance and income protection insurance deductions could yield a cumulative increase of approximately $871.
As tax season approaches, it’s critical to stay informed about what you’re entitled to claim, ensure you’re supporting your claims with appropriate documentation, and consult with professionals if needed to maximise your tax refund.
