Tax Deductions You Might Be Missing

Work-Related Expenses

Many employees miss out on work-related deductions. You can claim expenses directly related to earning your income — including uniforms, tools, equipment, union fees, and home office costs. If you work from home, you can claim a fixed rate per hour for running costs (electricity, internet) or use the actual cost method. Keep receipts and a record of hours worked from home. The ATO provides a fixed rate method that simplifies the calculation.

Self-Education and Courses

If you took a course, attended a conference, or purchased professional development materials that maintain or improve your current job skills, you can claim the cost. This includes course fees, textbooks, travel, and accommodation. The course must be directly related to your current employment — not a course that qualifies you for a new career entirely. The ATO closely scrutinises education claims, so keep detailed records.

Health-Related Deductions

Out-of-pocket medical expenses are no longer directly claimable as a tax deduction for most people, but you may be eligible for the net medical expenses tax offset if you or a dependant have significant disability-related costs. You can also claim the cost of prescription glasses, contact lenses, and laser eye surgery if they are supported by a prescription. Travel costs to see a specialist may also be deductible in limited circumstances.

Investment and Property Deductions

If you own an investment property, you can claim a wide range of expenses including interest on your investment loan, property management fees, council rates, repairs and maintenance, and capital works deductions (building depreciation). For share investments, you can claim the cost of brokerage when buying and selling, and you may be eligible for the 50% CGT discount if you hold assets for more than 12 months.

Donations and Gifts

Donations of $2 or more to registered deductible gift recipients (DGRs) are tax deductible. This includes cash donations, but also goods you donate to charity — you can claim the market value of the item. Keep the receipt for any donation over $10. For donations over $2, the ATO requires a receipt showing the charity's name, ABN, and donation amount.

Work-Related Expense Deductions

If you incur expenses directly related to your employment, you may be able to claim deductions. Common work-related deductions include: uniforms and protective clothing, tools and equipment required for your job, home office expenses (if you work from home), travel between different work locations, and professional development courses.

To claim work-related deductions, the expense must be directly related to earning your income, you must have spent the money yourself (not reimbursed by your employer), and you must have a record of the expense. The ATO has specific guidance on what can be claimed for different professions.

Investment and Property Deductions

If you own investment properties or shares, you may be able to claim deductions. For investment properties: interest on loans used to purchase the property, property management fees, council rates and strata levies, repairs and maintenance, and depreciation of building and fixtures. For shares: brokerage fees, interest on borrowed funds used to purchase shares, and the cost of investment advice.

Capital gains tax applies when you sell investments for more than you paid. If you hold investments for more than 12 months, you may be eligible for a 50% CGT discount (for individuals). Keep records of all purchase and sale transactions.

Other Common Deductions

Other deductible expenses include: charitable donations of $2 or more to registered charities, tax agent fees (deductible in the following year), cost of managing tax affairs (e.g., travel to see your accountant), and certain medical expenses (for eligible disability aids and services).

Self-education expenses related to your current employment are deductible if they maintain or improve your skills. However, education that qualifies you for a new career is not deductible. Always check the ATO guidance before claiming.

Frequently Asked Questions

Can I claim home office expenses?
Yes, if you work from home. You can use the ATO's fixed-rate method (67 cents per hour) or the actual cost method. Keep a record of hours worked from home. The fixed-rate method is simpler for most people.

What records do I need to keep?
Keep receipts, invoices, bank statements, and diary records of expenses. Digital records are acceptable. The ATO recommends keeping records for 5 years from the date you lodge your tax return.

Can I claim deductions for gym membership?
Generally no, unless your employment specifically requires a high level of fitness (e.g., professional athlete, firefighter, police officer). The ATO considers gym membership a personal expense for most people.

Should I use a tax agent?
A registered tax agent can help you identify legitimate deductions you may have missed and ensure your return is correct. The cost of the tax agent is deductible in the following year. Many people find the fee is offset by the additional deductions identified.