The Australian Taxation Office allows taxpayers to claim as a deduction expenses incurred in earning assessable income.

The Income Tax Assessment Act 1997 categorises deductions into general deductions and specific deductions. Generally, a deduction may only be claimed by a taxpayer to the extent the expense is incurred in earning assessable income.

The Income Tax Assessment Act 1997 states that a taxpayer can claim a deduction for expenses if:

• the expense has been necessarily incurred in the process of earning the person’s assessable income, or incurred in carrying on a business for the purpose of earning assessable income and
• it is not private (domestic) or capital expenditure, and
• it is not capital in nature, and
• a specific provision of the Income Tax Assessment Act 1936 does not preclude the expense from deduction, and
• the person holds the relevant written evidence of the expense where required.

For an expense to be deductible you must:

• have a record to prove the expense
• have spent the money yourself
• not have been reimbursed for the cost
• be able to prove the expense related to your job
• have records to prove the work-related portion of the expense

Broadley speaking deductible expenses can be categorised into the following groups:

• Motor vehicle & travel expenses
• Protective clothing & laundry expenses
• Self-education expenses
• Mobile telephone use
• Working from home expenses & internet
• Professional subscriptions & union fees
• Other work-related expenses
• Gifts & Donations over $2
• Tax agent fee

We at Carmelo Mirabile & Co. are focused on maximising your legal deductions and minimising the amount of tax you pay while giving you peace of mind and still allowing you to sleep at night.