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Tax deductions can reduce your taxable income, but many Australians overlook expenses simply because they are unsure whether they qualify. Others assume that an expense is automatically deductible when the ATO actually requires a direct connection with earning income.
The basic rule is straightforward: you generally need to have paid the expense yourself, it must relate directly to earning your income, and you need records to support your claim. If an expense has both work and private use, only the eligible work-related portion can generally be claimed.
Here are 20 commonly overlooked deductions worth checking before lodging your next tax return.
1. Working From Home Expenses
If you work from home to perform your employment duties, you may be able to claim eligible running expenses. For the 2025–26 income year, the ATO fixed-rate method is 70 cents per hour, subject to the eligibility and record-keeping requirements. The actual-cost method is another option.
2. Work-Related Phone and Internet
If you use your mobile phone or internet for work, you may be able to claim the work-related portion of the cost. Private use needs to be excluded.
3. Work-Related Travel
Travel undertaken while performing your work duties can sometimes be deductible. However, ordinary travel between home and your regular workplace is generally private, so don’t assume every work-related trip qualifies.
4. Work-Related Car Expenses
If you use your car for eligible work-related travel, you may be able to claim the relevant expenses using an available calculation method. From 1 July 2026, the cents-per-kilometre rate is 91 cents per kilometre for the 2026–27 income year, subject to the applicable rules.
5. Professional Memberships
Membership fees for relevant professional associations, registrations and industry bodies can potentially be deductible when they have the required connection with your employment.
6. Union Fees
Eligible union fees can be included as a deduction. Keep evidence of the amount you paid during the income year.
7. Self-Education Expenses
Courses, training and other education expenses may be deductible where there is a sufficient connection with your current employment. Education that simply qualifies you for a completely new career may be treated differently.
8. Work-Related Books and Publications
If you purchase specialist books, journals, subscriptions or other publications specifically connected with your income-producing activities, they may qualify for a deduction.
9. Tools and Equipment
Tools and equipment needed for your work may be deductible. Depending on the item’s cost and circumstances, you may claim the expense immediately or claim its decline in value over time.
10. Work-Related Clothing and Laundry
Certain compulsory uniforms and protective clothing may qualify. Ordinary everyday clothing generally does not become deductible simply because you wear it to work.
11. Donations to Eligible Organisations
Gifts of $2 or more to organisations that qualify as deductible gift recipients can generally be claimed, provided the relevant requirements are met. A donation is not automatically deductible just because it was made to a charity.
12. Income Protection Insurance
Eligible income protection insurance premiums can potentially be deductible when the policy and circumstances meet the relevant tax requirements.
13. Investment-Related Interest
Interest on money borrowed for income-producing investments may be deductible in appropriate circumstances. The important point is the connection between the borrowing and the income-producing investment.
14. Investment Management Expenses
Certain expenses involved in managing income-producing investments may qualify for a deduction, depending on the nature of the expense and investment.
15. Tax Agent Fees
The cost of managing your tax affairs can itself be deductible in appropriate circumstances. This is one reason taxpayers should keep invoices from their tax professional rather than overlooking them at tax time.
If you’re unsure what can legitimately be included in your return, professional Individual Tax Return Services can help you identify potential deductions while keeping the claim within ATO requirements.
16. Work-Related Software and Digital Tools
Software, apps and digital subscriptions used for employment purposes may qualify where they have a sufficient connection to earning your income. Private use generally needs to be excluded.
17. Work-Related Computer Equipment
A laptop, monitor or other equipment used for work may potentially be deductible. Where an asset has both work and private use, the claim generally needs to be apportioned. More expensive assets may need to be claimed through decline in value rather than as an immediate deduction.
18. Overtime Meal Expenses
Some overtime meal expenses can be deductible where specific conditions are met. Simply buying lunch or dinner while working does not automatically make the expense deductible.
19. Expenses Connected With Managing Investments
Investors sometimes overlook smaller costs associated with maintaining income-producing investments. Depending on the circumstances, expenses such as investment advice or relevant portfolio-management costs may have deductible components.
20. Expenses You Paid Yourself but Forgot to Record
Sometimes the biggest missed deduction is simply an expense that was never recorded.
Receipts, invoices, bank records, work-use calculations and other supporting documents can make it much easier to identify legitimate claims when preparing your return. The ATO generally requires records supporting deductions to be retained for five years.
Before Claiming Any Deduction
A deduction isn’t available just because an expense feels work-related. Before including it in your tax return, ask:
- Did I actually pay for it?
- Was I reimbursed by my employer?
- Does it directly relate to earning my income?
- Is any part of it private?
- Do I have records to support the claim?
If an expense has mixed work and private use, only the eligible portion should generally be claimed.
Final Thoughts
Missing legitimate deductions can mean paying more tax than necessary, while claiming expenses without meeting the rules can create problems later. The goal is not to claim as much as possible, but to identify every deduction you are genuinely entitled to claim and keep the right evidence.
If you are preparing your annual return and aren’t sure which expenses apply to your situation, a Registered Tax Agent Perth can help review your records, identify relevant deductions and prepare your return in line with current Australian tax requirements.
Note: Tax deduction eligibility depends on individual circumstances. Always check the current ATO requirements or obtain professional advice before making a claim.
