7 Tax Deductions you can't Claim on your Tax Return
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Private Health Insurance

Every year, health funds run commercials encouraging people to sign up and save on their tax returns. While these ads may be tempting, the reality is quite different. Unless your Medicare Levy Surcharge (MLS) income is greater than $90,000 for singles or $180,000 for families, there are no savings to be had.

If your income exceeds those amounts, having Private Hospital Cover can save you from paying the MLS, which can be 1%, 1.25%, or 1.5% of your MLS income, depending on your income.

To calculate your MLS income, you need to add your taxable income, reportable fringe benefits (as reported on your payment summary), total net investment losses, reportable super contributions, exempt foreign employment income, and your spouse’s 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.

In summary, while signing up for private hospital cover may be beneficial for some people, it’s important to check your MLS income first to ensure that you’re eligible for savings.

Laundry Cost

When it comes to work-related expenses, many people assume that the cost of laundering work clothes is automatically tax-deductible. However, this is not necessarily the case, and there are certain criteria that must be met to claim such a deduction.

In general, to be eligible for a tax deduction, work clothes must be protective, part of a uniform, or occupation-specific clothing. Examples are protective gear like hard hats, safety glasses, steel-capped boots, and high-visibility clothing worn by construction workers. Uniform items such as branded shirts and pants worn by retail employees, airline staff, or healthcare workers can be claimed.

When it comes to laundering costs, only the clothes that meet the above criteria can be claimed. The cost of purchasing and maintaining the eligible work clothes can be claimed, but not the cost of laundering regular clothes that are worn to work.

It’s essential to understand the guidelines around tax deductions for work-related expenses to ensure that you’re claiming everything you’re entitled to and avoiding any issues with the Australian Taxation Office. So, before claiming laundry expenses for work clothes, ensure that the clothes meet the eligibility criteria.

Charity donations when you receive something in return

Charitable giving is an excellent way to give back to society while also benefiting from tax deductions. However, it’s important to understand the guidelines around claiming tax deductions for charitable donations, especially when you receive something in return.

It’s generally known that you can claim a deduction for donations of $2 or more to approved charitable organizations. But it’s worth noting that any money given to a charity where you receive something in return, such as a lottery ticket, a meal, or a small gift, cannot be claimed.

The Australian Taxation Office (ATO) sets out the guidelines for what can and cannot be claimed. According to the ATO, donations must be freely given, and there should be no material benefit to the donor in return for their contribution. For example, if you donate $100 to a charity and receive a pen or a keyring worth $5, you can only claim a deduction for $95.

It’s important to note that donations made through crowdfunding platforms such as Kickstarter or GoFundMe may not always be tax-deductible. The ATO advises checking with the platform or the charity to ensure that your donation is tax-deductible.

In summary, charitable donations are a great way to contribute to society while also benefiting from tax deductions. However, to claim a tax deduction, donations must be made freely and without any material benefit to the donor. So, if you receive something in return for your contribution, it’s best to check with the charity or the ATO to determine if you’re eligible for a deduction.

Work Clothes

Many people are curious about what they can and cannot claim as tax deductions, and one common question that arises is whether they can claim the cost of work clothes. For example, a common query is whether someone who works at a fashion store can claim the cost of buying their store’s clothes for work purposes.

The answer is not straightforward. In general, the cost of buying work clothes is not deductible, unless the clothes are considered protective, part of a uniform, or occupation-specific. This means that everyday clothing, such as their store’s shirts and jeans are worn by a fashion store employee, is not deductible.

It’s important to note that the clothing must be distinctive to the occupation or the employer, and not something that can be worn outside of work. For example, a business suit and tie, while required for some professions, cannot be claimed as a tax deduction.

In summary, claiming the cost of work clothes as a tax deduction can be complex, and depends on several factors. In general, everyday clothing is not deductible, but protective or occupation-specific clothing may be deductible. It’s essential to seek advice from a tax professional to ensure that you’re claiming the right expenses and that you’re complying with the Australian Taxation Office’s guidelines.

Self Education Expenses

Self-education expenses are a commonly asked-about topic when it comes to tax deductions. It’s essential to understand that the Australian Taxation Office (ATO) has strict guidelines about what can be claimed as a tax deduction.

In general, self-education expenses can be claimed if they are directly related to your current job or profession. For instance, a massage therapist taking a course to learn new massage techniques can claim the cost of the course as a tax deduction.

However, there are limitations. If you’re studying for a completely different job or profession, such as an accountant studying massage therapy, then the cost of the course cannot be claimed as a tax deduction.

It’s important to note that not all self-education expenses are deductible. For example, travel expenses to attend a course or seminar may be deductible, but only if the course or seminar itself is deductible.

In summary, self-education expenses can be claimed as a tax deduction if they are directly related to your current job or profession. However, there are limitations, and it’s important to seek advice from a tax professional to ensure that you’re claiming the right expenses and that you’re complying with the ATO’s guidelines.

Phone Plans

When it comes to claiming phone plan expenses on your tax return, it’s important to understand that you can’t claim the entire cost of the plan just because you use it for work-related calls. Instead, you need to keep a log or diary of your phone usage for a month to determine the percentage of business and personal use. The business use percentage can then be applied to the cost of the plan, and a pro-rata amount can be claimed as a tax deduction.

It’s worth noting that this method only applies to phone plans that include both business and personal use. If you have a dedicated work phone, then the entire cost of the phone and plan may be claimed as a tax deduction.

Airfares for Fly in Fly out workers

Fly-in fly-out (FIFO) work arrangements are common in industries such as mining, where workers have to travel long distances between their homes and workplace. However, the distance covered doesn’t determine whether or not you can claim a tax deduction. According to the Australian Taxation Office (ATO), travelling to work is considered a personal expense and cannot be claimed as a deduction.

As per the ATO’s 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.” This means that even if you are required to fly in and fly out for work, you cannot claim the airfare expenses for the travel between your home and the place of departure as nominated by your employer.


These are some of the most frequent circumstances whereas as a tax agent I have to say “no, that’s not deductible”. It’s important to understand the rules and regulations surrounding tax deductions to avoid any issues with the ATO. As always, if you have any doubts or questions about what can and cannot be claimed, it’s best to consult with a professional tax agent or accountant.

Once you have lodged your return and your refund is on the way to you, take moment to look at my other post, 5 Green Ideas to Spend Your Tax Refund.

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  1. Yes i agree with all of daves comment. Tax is confusing i am in that large boat. Good job geoff another dave.

  2. Interesting and informative article! I think this is an important topic because many people do these things and thought that they can claim their tax afterwards. This should be disseminated and thanks for this info Geoff!

  3. Another interesting one. And your website person is doing a good job easy to use. And worth a look at . The mls comment at the top had me thinking whats mls but read on for the explanation .I like a simple explanation and the whole article had that. I am certainly in a large boat of people who see accountants because we can’t work it out ourselves. Regards dave

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