7 Tax Deductions you can’t Claim on your Tax Return

Private Health Insurance

I see the commercials every year from the health funds, sign up now and save on your tax return, I am even tempted to sign up myself. However, the reality is completely different, unless your MLS income is greater than $90,000 if you are single or your families income is greater than $180,000 then there are no savings at all.

Once your income exceeds those amounts then having Private Hospital Cover will save you paying the Medicare Levy Surcharge which can either be 1%, 1.25% or 1.5% of your MLS income depending on that income.

(MLS Income = taxable income + reportable fringe benefits (as reported on your payment summary) + total net investment losses + reportable super contributions + exempt foreign employment income + if you have a spouse, their share of the net income of a trust on which the trustee must pay tax (under section 98 of the Income Tax Assessment Act 1936) and which has not been included in their taxable income.)

Laundry Cost

The cost of laundering your work clothes is not an automatic tax deduction, there are some criteria that need to be met. Your work clothes must be protective, part of a uniform, or occupation specific clothing.

So the laundering of clothes that are worn to work that fall outside the above criteria can not be claimed as a tax deduction.

Charity donations when you receive something in return

We all know that you can claim a deduction for donations of $2 or more to approved charitable organisations.

What can’t be claimed is any money given to a charity where you receive something in return like a lottery ticket, a meal or a small gift.

Work Clothes

One of the questions most asked by my clients is “Can I claim the cost of clothes that I need to buy cause I work at a fashion store? The answer is, unfortunately, no, unless the clothes are protective or part of a uniform or occupation specific.

Self Education Expenses

This is an item that I often say no to, if you are studying for a completely different job, for example, an accountant studying massage therapy, then the tax deduction would not be allowed.

The self-education expense must be related to your current work activities, a massage therapist learning new techniques relate to massage will be fine.

Phone Plans

Even though you need need to pay for the whole plan to make a single call for work related reasons the cost of the whole plan can not, therefore, be claimed. A log or diary needs to be kept for a month to work out the business and personal use of the phone and that percentage can be applied to the plan cost and a pro-rata amount can be claimed

Airfares for Fly in Fly out workers

This is particularly common for mining workers who have travel great distances between home and work, the distance covered bears no relationship as to whether you can have a tax deduction or not. In essence, you are still travelling to work, and that is a personal expense.

From the ATO website “You cannot claim your travel expenses for travelling to your home and the place of departure as nominated by your employer under fly-in/fly-out arrangements.”

These are 7 of the most frequent questions asked where a “sorry, that can not be claimed” response is given.