Ultimate Guide to
Personal Tax Deductions in Australia
For Individuals, Couples & Families | Key Tax Tips & Guide |
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Tax Planning.
What is a Tax Deduction?
Types of Income.
End of Year Tax Returns
Tax time in Australia can be complex — especially if you’re not across the latest rules, deductions, and reporting requirements. Whether you’re an employee, small business owner, investor, or part of a dual-income household, understanding your income, entitlements, and responsibilities can lead to a better refund outcome — or a reduced tax bill.
At Bottrell Accountants, we’ve worked with thousands of individuals, couples and families across Australia to help them maximise deductions, avoid ATO red flags, and ensure their tax position supports their long-term financial goals. This page is your complete guide to understanding personal tax deductions in Australia.
What Is a Tax Deduction?
A tax deduction reduces your taxable income. You don’t get the amount back in cash, but it lowers the income figure the ATO uses to calculate your tax.
Example: If you earn $90,000 and claim $5,000 in deductions, the ATO calculates your tax on $85,000. This can reduce how much tax you owe, or increase your refund.
To legally claim a deduction, you must:
- * Have paid for the item or service yourself
- * Ensure it relates directly to your income
- * Keep records to prove it (e.g. receipts, logs)
Types of Income You Must Declare
All income must be declared in your tax return, even if it was earned overseas, paid in cash, or split across multiple jobs or accounts. The ATO receives pre-filled data from many sources, so accurate reporting is essential.
Income categories include:
- * Employment income: salary, wages, bonuses, commissions, allowances
- * Government payments: Centrelink, JobSeeker, Parenting Payment, pensions
- * Investment income: interest, dividends, distributions, trust income
- * Rental income: including from Airbnb, short stays, and long-term tenants
- * Business or sole trader income: freelance work, contract income, online business sales
- * Capital gains: on assets like shares, property, or cryptocurrency
- Foreign income: if you’re an Australian tax resident
Failure to declare all income may result in ATO penalties, interest charges, or audits.
Allowable Expenses.
Car Expenses.
Travel Expenses.
Uniforms & Protective Clothing.
Tools & Equipment.
Working from Home.
Self-Education,
Professional Development.
Work-Related Deductions
Car Expenses
If you use your personal car for work purposes (excluding the daily commute), you can claim:
- * Fuel
- * Repairs
- * Insurance
- * Registration
- * Loan interest
- * Depreciation
Claim methods:
- * Cents per kilometre (up to 5,000km)
- * Logbook method (claim a % of total costs over 12-week logbook period)
Travel Expenses
Work-related overnight trips may allow claims for:
- * Airfares
- * Accommodation
- * Meals and incidentals
- * Car hire or taxi fares
Keep receipts and a travel diary if away for 6+ nights.
Uniforms & Protective Clothing
- * Compulsory branded uniforms
- * PPE: safety boots, gloves, * goggles, hi-vis
- * Laundering and dry-cleaning costs (reasonable rates apply)
You can’t claim general clothes (e.g. black pants, white shirts), even if required for your job.
Tools & Equipment
You can claim:
- * Computers, laptops, tablets
- * Mobile phones
- * Professional tools (e.g. trade, IT, creative)
- * Repairs or maintenance
Assets under $300 may be claimed outright. Others must be depreciated.
Working from Home
With remote and hybrid work now common, home office expenses can include:
- * Internet and phone
- * Electricity and gas
- * Depreciation of office furniture
- * Stationery and supplies
Methods to claim:
- * Fixed rate: 67c per hour (covers most expenses)
- * Actual cost: more complex but can yield larger deductions
Self-Education & Professional Development
If your course directly relates to your current job or boosts skills in your existing employment, it’s likely deductible. This includes:
- * Course fees (non-HELP)
- * Textbooks and materials
- * Equipment used for study
- * Travel to/from campus
- * Internet and phone (used for study)
Courses unrelated to your current employment (e.g. career changes) are not deductible.
Investment Income & Deductions.
Business Income.
Business Expenses.
Investment Income & Related Deductions
You must declare:
- * Interest from savings or term deposits
- * Dividends from shares or ETFs
- * Income from managed funds or crypto staking
Deductible expenses:
- * Interest on margin loans or investment property loans
- * Financial adviser fees (if related to income)
- * Ongoing account fees or subscriptions
Note: borrowing costs over $100 must be amortised over 5 years.
Sole Traders & Business Income
As a sole trader or freelancer, your business income and expenses form part of your personal return.
Deductible business expenses:
- * Advertising & marketing
- * Website, domains, hosting
- * Business phone, internet, software
- * Rent or use of home office
- * Bank fees, insurances, subscriptions
- * Superannuation (voluntary personal contributions)
A good record-keeping system is crucial to separate business and personal transactions.
Rental Income.
Rental Expenses.
Capital Gains Tax (CGT).
Superannuation.
Private Health.
Medicare Levy Surcharge.
Rental Property Income & Deductions
Declare all rent, bond claims, and insurance payouts.
Common rental deductions:
- * Interest on investment loans
- * Council rates & water charges
- * Repairs (non-structural)
- * Property management fees
- * Depreciation (building & fixtures via schedule)
- * Insurance (building, landlord, contents)
Get a tax depreciation schedule prepared by a quantity surveyor to optimise claims.
Capital Gains Tax (CGT)
You may incur CGT when selling:
- * Property (excluding your main residence, with exceptions)
- * Shares, ETFs or managed funds
- * Crypto assets
You can reduce CGT liability through:
- * 50% discount (if held >12 months)
- * Subtracting capital losses
- Including ownership costs (legal, stamp duty, improvements)
CGT is complex. Accurate records are key.
Superannuation Contributions
Concessional contributions (e.g. voluntary salary sacrifice) are capped annually ($27,500 for 2023–24). These may be tax-deductible.
To claim personal contributions:
- * Deposit into your super fund
- * Submit a ‘Notice of Intent to Claim’ form
- * Receive acknowledgment
You may also be eligible for:
- Spouse contributions (offset up to $540)
- Government co-contributions (if earning < $57,016)
Private Health, Rebates & Offsets
Medicare Levy Surcharge (MLS)
Applies if:
- * Individual income > $93,000
- * Couple/family income > $186,000
Avoided by holding appropriate private hospital cover.
Other tax offsets:
- * Low and Middle Income Offset (LMITO)
- * Spouse tax offset (if partner earns < $40,000)
- * SAPTO (Seniors and Pensioners Tax Offset)
Family & Couple Tax Planning
Your tax return may be individual, but smart planning can benefit your household:
- * Structure investment ownership efficiently
- * Share income-producing assets
- * Offset super contributions
- * Retain FTB or CCS benefits
We help couples & families optimise outcomes with shared planning.
Importance of Using a Registered Tax Agent
ATO rules change regularly. Using a registered tax agent like Bottrell ensures:
- * Accurate, compliant returns
- * Legal maximisation of deductions
- * Advice tailored to your career or life stage
- * Extended lodgement deadlines
Agents are regulated by the Tax Practitioners Board (TPB) and must meet training standards.
Record Keeping – Stay Organised, Stay Safe
The ATO requires you to keep tax records for 5 years.
What to keep:
- * Receipts, invoices, bank statements
- * Travel logs, diaries, rosters
- * Share trading and crypto records
- * ncome summaries
- * oan and property documents
Use apps (e.g. ATO myDeductions), cloud folders, or accounting software. We can help set up a streamlined digital system.
Why Choose Bottrell Accountants & Tax Agents?
Bottrell Accounting, Taxation & Financial Planning
- Accounting:
- Taxation:
- Business Owners
- SMSF
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