How to claim tax deductible expenses as an individual
As an individual taxpayer, you know it’s mandatory to submit your annual tax return to the Australian Taxation Office (ATO) at the end of each financial year (ending each June).
Did you know that you claim expenses against some of your work and personal expenses?
Let’s look at what expenses you can claim and the process for reducing your taxable income.
What’s your taxable income?
You only pay tax on what’s known as your ‘taxable income’. By making an eligible claim for expenses, you can reduce the total of this taxable income. In short, this means you will pay less in tax – with the tax deductible items deducted from your total taxable income.
Work-related expenses you can claim
If you’re incurring expenses as part of your job or self-employment, you can claim some of these expenses back and lower your overall income tax bill.
To claim a deduction for a work-related expense:
- You must spend the money yourself and not get a reimbursement
- The expense must directly relate to earning your income
- You must have a record to prove it (usually a receipt)
Costs that you may be able to claim against include: - Cars, transport and travel expenses
- Tools, computers and items you use for work
- Clothes and items you wear for work
- Working from home expenses
- Education, training and seminar expenses
- Memberships, accreditations, fees and commissions
- Some meals while working overtime
- Medical and health expenses
Not all tax deductible expenses relate to your employment. There are other areas where you may be able to reduce your taxable income.
These include:
- Gifts and donations
- Expenses related to earning income from investments
- Personal super contributions
- Income protection insurance
- The cost of managing your tax affairs.
How to make a claim for expenses
Keeping records is a vital part of making a claim for expenses. The ATO will need to see receipts and records that show you incurred the expense.
You can use the myDeductions tool in the ATO app to help keep track of your work-related expenses (such as vehicle trips) and general expenses (such as gifts and donations).
These records can be uploaded when you lodge your return online with myTax, or you can share them with us, as your registered tax agent and accountant.
Talk to us about about making a claim for expenses
Claiming the expenses you’re due can make a big difference to your tax bill.
Talk to our team about setting up the right record-keeping processes and claiming the tax deductible expenses that you’re eligible for, both in and out of work.
Keeping your tax and expenses in check when you are self-employed
Contracting or freelancing requires you to wear a lot of hats. Relationship-building, keeping track of your time, marketing your skills and actually doing the work. But one of your priorities should also be establishing how you handle your money and setting the groundwork for good habits.
Understand your deductions
Before you start, it’s essential to understand what expenses you can and can’t claim. This means you’ll keep the right receipts and track the right expenses. Figuring out what’s what can be a little confusing as everyone has a different working set up and what you can claim for can vary between industries and occupations. Talk to us about your business expenses from the beginning. This will also help you plan for any bigger work-related purchases that you may need to make.
Get a system sorted
You’ll thank yourself later for setting up a good system now. Getting your expenses recorded and your invoices collated means you’ll be able to spend more time doing the important stuff in your business. It’s not just about saving time – keeping on top of your cash means you’re more likely to succeed. Do your research and choose a system that will work for you. Consider choosing a software platform which allows you to record your time spent on projects, it’ll make sending those invoices that much easier!
Stash that cash
When you’re running your own business or working for yourself, it’s important to always keep your tax obligations top of mind. Make sure you have money set aside in a separate account or consider entering into voluntary instalments.
One way to budget and keep on top of your business tax is to pay yourself a wage. Keeping your accounts separate also prevents you from thinking of all your business income as spending cash! Remember to also put aside a little extra to cover your holidays and any quiet periods.
We can help make this process easier, so talk to us about setting up systems that take the headaches out of your finances.
Understanding Your Tax Obligations as a Business Owner
Whether you’re starting fresh or have been in business for years, staying compliant with tax and super requirements is critical. We’re here to help you manage the essentials so you can focus on growing your business.
Here are key areas we support business owners with:
✅ GST Registration
We’ll review your situation to confirm if registration is required (turnover above $75,000 or $150,000 for non-profits), and help you decide if voluntary registration is right for you.
✅ PAYG Instalments
Avoid the shock of a large tax bill at year-end. We can help set up and manage PAYG instalments to keep your cash flow steady and predictable.
✅ Employer Obligations
If you have employees, we’ll make sure PAYG withholding and superannuation contributions are handled correctly, so you meet deadlines and avoid penalties.
✅ Side Hustles & Multiple Incomes
Running a side hustle or managing different income streams? We’ll assess whether these qualify as a business and guide you through GST, PAYG and super obligations.
Why work with us?
We provide tailored advice based on your unique business needs, not one-size-fits-all guidance. Our goal is to give you peace of mind, ensure compliance, and free up your time to focus on what you do best.
Contact us today to discuss how we can support your business.
