The five most overlooked tax deductions

Tax Time is 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 some 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 investment magazines, such as those focusing on shares or investment properties.
   
   Don’t forget, if you prepay your fees or subscriptions for the next tax year before 30 June 2023, 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 on a rental property, many of which are often overlooked. 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

• Repairs

• End of lease cleaning costs

• Letting agent fees, including marketing

• Strata title costs

• Land tax

• Credit checks on prospective tenants

• Advertising for tenants

• Hiring a debt collector to collect rent arrears.

• Getting new keys cut.

• Servicing items such as hot water heaters, smoke alarms, air-conditioning systems and garage door mechanisms.

• Quantity surveyor for preparing a depreciation report.

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 in 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. Superannuation: You can make additional concessional contributions up to your concessional contributions cap (currently $27,500) and claim an income tax deduction for doing it. This means you can tax effectively top up your super, provided you don’t breach your concessional contributions cap. The super guarantee payments made by your employer, as well as any salary sacrificed contributions, are also included in your concessional contributions so effectively the amount you can pay into super through a tax deductible contribution is the difference between those other contributions and the $27,500 cap.

So, if you have some spare cash, this can be great way to boost your retirement savings and claim a tax deduction for doing it. The payment must be made within the current tax year and you need to advise your super fund that you’ve made the payment by the time you lodge your 2023 return (your super fund or accountant can give you guidance on how to complete the form and there’s a standard form on the ATO website here: https://www.ato.gov.au/forms/notice-of-intent-to-claim-or-vary-a-deduction-for-personal-super-contributions/

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