Tax deductions: 10 of the biggest that many Aussies overlook

Hundreds of millions of dollars go begging each year in forgotten tax deductions, but some can be recovered. See our top 10 list.

Anthony KeanePersonal finance writer

@keanemoney

3 min read

October 29, 2024 - 4:00AM

The Australian Business Network

Being smart about tax deductions can deliver a financial windfall. Picture: iStock

National

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Forgotten tax deductions are costing Australians a huge chunk of money each year, but taxpayers have ways to claw back their missing refunds.

There are just three days remaining for individuals to lodge their 2023-24 tax return – unless they quickly sign up with a tax agent – although people who already have filed can amend it if deductions were overlooked.

H&R Block estimates that the 3.3 million Australians who do DIY tax returns are losing up to $300 million of unclaimed deductions annually, and tax specialists say even those who use an accountant can miss out because they fail to keep records and logbooks.

Some of the most often-forgotten deductions include personal superannuation contributions, working from home costs, rental property expenses and some insurance premiums, they say.

Many tax deductions are misunderstood, said H&R Block director of tax communications Mark Chapman.

“Often, it quite simply never occurs to the taxpayer that they are entitled and, particularly with rental property expenses, there are so many possible deductions they can be quite tricky to keep track of,” he said.

Time’s almost up for individuals to file their 2024 tax return. Picture: iStock

Subscriptions have boomed in recent years and some can be tax-deductible.

“If you’re a member of a professional or trade association as part of your work, you can claim a deduction for the amount you pay in subscriptions,” Mr Chapman said.

“This also covers union fees if you’re a member of a trade union, as well as subscriptions to trade or professional magazines or – if you’re an investor – subscriptions to investment magazines,” he said.

The Australian Taxation Office said last week that more than 9.4 million people had already lodged their tax returns, with a further 1.5 million expected to need to lodge this year.

Mr Chapman said people who overlooked a big deduction this year could not simply add it to next year’s 2025 tax return, but they could lodge an amended tax return.

“This quite a simple process – you can submit an amendment to your income tax return using myTax,” he said.

“An online amendment takes about 20 days to process. Or you can get a tax agent to lodge the amended return for you.”

Chartered accountant and Mr Taxman founder Adrian Raftery said there was a two-year limit for amendments to tax returns.

“You can’t amend your 2022 return but you can amend your 2023 one,” Dr Raftery said.

“If the ATO owes you money, do it, but make sure you are precise with every single deduction in your return.”

Dr Raftery said “without doubt” many taxpayers left money on the table.

“People who do their tax themselves don’t get the full range of deductions,” he said.

“For example, not knowing they can claim their income protection insurance – that’s a really common one.”

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Others missed on accurate motor vehicle deductions because they did not keep a logbook, Dr Raftery said, while large deductions for personal super contributions and investment loan interest were also overlooked.

He said some people left out tax deductions because they wanted to fly under the radar of the ATO “even though they have nothing to worry about”, while others did not understand the rules so they did not “go to the boundary”.

October 31 is the deadline for self-preparers, although people who register with a tax professional before then have until May 2025. “Don’t call the ATO and ask for an extension – you’re wasting two hours on hold when you could probably spend that time doing your tax return,” Dr Raftery said.