Paying taxes on time is an essential part of our civic responsibilities. The amount of money we pay as taxes comes back to us in benefits and welfare activities. For this reason, it’s important for every eligible citizen to pay taxes. However, to make sure taxes aren’t too hard for you, you can get certain tax deductions. So, you must know what tax deductions are available in Australia.
Tax deductions are certain cashback you get while paying taxes. There are some fields of work that are subsidized by the government. If you work in those fields, you will get a certain amount of your taxes paid back to you.
In this article, we will discuss what tax deductions are available in Australia and how to avail them. Let’s begin!
What Tax Deductions are Available in Australia?
The tax deductions you’re eligible for in Australia include:
Non-Resident Taxes:
Suppose you’re a foreigner residing in Australia. In that case, you have to pay taxes at an amount higher than the amount for an average citizen. You have to file a tax return for any amount of money you make in Australia as a non-resident.
However, once you receive your residence, you can ask for tax deductions. You have to provide proof of your payments. You’d get a certain amount of deductions based on your previous expenses and tax returns.
Home Office:
The once-in-a-lifetime pandemic has forced us to things that we weren’t used to before. These include shifting all our regular office affairs to our home and conducting all our necessary office work from home.
Making your home office can be a daunting task. There are many expenses involved from furniture to electronics and technology, which might be hard for small businesses to bear. To make matters more comfortable for you, the Australian government is providing tax deductions on any home office-related expenses.
However, this expense is a bit technical. You’re only eligible for deductions on things that you can only use for home expenses. For example, furniture like tables and office chairs and the cost has to be within 300AUD. Regular household expenses such as the internet, rent, mortgages, etc. aren’t considered eligible for tax deductions.
Travel:
If your work requires you to travel a lot, you can get tax deductions on your travel expenses. However, this deduction is only available for long-distance travels you make for your work. Personal trips, trips to and from regular workplace to home aren’t considered eligible for any sort of deductions.
However, you need to provide actual proof of your expenses. These include tickets, travel plans, travel logs, etc. You might also need to show evidence that the trip was for work with documents from your workplace.
Education and Training:
Sharpening up your skills is a must for excelling in your field of work. The best way to master your skills in the field of work is through training. You can gain many kinds of training for work, and receive tax deductions for it.
However, suppose your training is funded by your workplace or is exclusive to your workplace, and it’s employees. In that case, you won’t receive any tax deductions on it. If you receive your training based on any scholarship or grant, you might not receive a tax deduction either.
Clothing and Uniform:
If you’re wondering what tax deductions are available in Australia, the most prominent tax reduction you can apply for is tax deductions for work-related clothing, and it’s maintenance.
If you have to buy specialized clothes for your area of work, or for your safety, you can apply for tax deductions on these clothes. These include uniforms of your workplace, protective gear such as gear and boots, costumes, etc.
However, suppose you have to buy generic clothing that can be worn outside your field of work. In that case, you won’t be eligible for deductions. For example, a simple suit won’t be available for deductions. Still, a suit with a company logo will be eligible for deductions.
Not only for just purchasing your clothes, but you’d also receive deductions for the maintenance of your clothes. Maintenance such as regular washing and repairing. If you need to wash your clothes from the laundry, you have to show documents such as laundry receipts as proof. If you wash these clothes at home, you need to keep track of how many washes you need and the money spent is washing.
When it comes to protective equipment, you’re eligible for tax deductions on any protective gear you buy for your work. However, if the equipment is provided or partially funded by your workplace, you won’t get any deductions.
Charities and Donations:
As a part of their social responsibility, companies generally provide donations and organise fundraisers to help different social causes. You can be eligible for deductions based on your contributions as well.
So, what tax deductions are available in Australia based on donations? Generally, if you have to pay any amount of tax on your donations, the tax will be returned to you. However, you won’t get back any money you pay as donations directly.
Investments:
The income you receive from investments is eligible for deductions as well. Investment income generally refers to an interest, grants, dividends, etc. from properties, partnerships or businesses you own.
The income you gain from investments is generally taxed beforehand. So, you won’t have to specifically pay taxes for these investments again.
Conclusion:
Tax deductions are a great way to reduce the burden of overwhelming taxes on your shoulders. They make taxes more affordable and save you from the burden of excess taxes. However, you have to know about deductions before taxes to make the best use of them.
The most important factor when it comes to tax deduction is knowing what tax deductions are available in Australia. In this article, we’ve discussed some of the significant tax deductions to help you in tax time. We hope you find this article helpful!