Five most overlooked tax deductions


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Tax time is almost here and whether you plan to use an agent to complete your return or do it yourself, it's vital that you claim deductions for everything that you're entitled to.

Here's a hit list of five of the most commonly overlooked tax deductions.

1. Professional memberships and subscriptions.


If you're a member of a professional or trade association as part of your work, you can claim a deduction for the amount you pay in subscriptions.

This also covers union fees if you're a member of a trade union, as well as subscriptions to trade or professional magazines or - if you're an investor - subscriptions to publications like Money magazine.

Don't forget, if you prepay your fees or subscriptions for next year before June 30, you can claim a deduction this year, which can be a useful timing benefit.

2. Rental property expenses.

Most people with a rental property know that you can claim a deduction for the interest element of the mortgage but there are plenty of other deductions you can claim, many of which are often forgotten.

So, if you've paid out for any of these costs this year, make sure you claim a deduction:

  • Gardening and lawn mowing 
  • Bank fees 
  • Pest control 
  • Security patrol fees 
  • Bookkeeping/secretarial fees 
  • Travel expenses to inspect the property 
  • Maintenance and repairs 
  • End of lease cleaning costs 
  • Letting agent fees, including marketing

3. Tax affairs.

If you paid for a tax professional to complete last year's tax return, you can claim a deduction for the cost in this year's return.

Better still, you can also claim a deduction for any travel costs you incurred getting to and from your agent.

If you've paid for any tax advice during the year, that too is deductible.

4. Income protection insurance

If you pay for insurance premiums against loss of income, those amounts are tax deductible.

But be careful; that doesn't include life insurance, critical care insurance or trauma insurance. It also excludes policies paid for out of your superannuation contributions.

5. Mobile phone and home internet expenses.

If you use your personal mobile phone for work - either to make or receive calls - you can claim the cost of these calls as a deduction.

You can only claim business-related calls so in order to work out the split between business and personal use, keep a diary for at least four weeks in order to work out the business use proportion.

For example, if you have a $100 monthly mobile phone plan and you determine - based on your diary - that 25% of your calls are work related, you can claim a deduction for $25 per month, or $300 per year.

Similarly, if you use your home internet service to deal with work related matters, such as responding to work emails, you can also claim a proportion of those costs. Remember, keep a diary!

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Mark Chapman is director of tax communications at H&R Block, Australia's largest firm of tax accountants, and is a regular contributor to Money. Mark is a Chartered Accountant, CPA and Chartered Tax Adviser and holds a Masters of Tax Law from the University of New South Wales. Previously, he was a tax adviser for over 20 years, specialising in individual and small business tax, in both the UK and Australia. As well as operating his own private practice, Mark spent seven years as a Senior Director with the Australian Taxation Office. He is the author of Life and Taxes: A Look at Life Through Tax.

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