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Five expenses you can’t claim as a tax deduction

As the countdown begins to Australia’s tax return lodgment date, many individuals in the country may be hurrying to find a few extra possible tax deductions to claim.

However, in the rush before the deadline, it is important not to waste time claiming deductions for expenses or items that are commonly thought of as tax deductible, but are knocked back by the ATO.

Volunteer work
Individuals cannot claim tax-deductions for expenditures while volunteering for charities or other not-for-profit organisations e.g. petrol used when driving out to help community efforts.

Police clearance and record checks
While some checks are required as a prerequisite to secure certain types of employment, the cost of these checks are not allowable deductions (the reason being that the cost is incurred at a point that is too soon to be associated with the employment income).

Vaccinations
Individuals, even those who work for certain airlines, cannot claim deductions for the cost of vaccinations against diseases they may come in contact with during the course of earning an income.  

Driver’s licence
Even if it is a condition of a person’s employment, the cost of a driver’s licence is not an allowable deduction.

Eviction of a tenant
Expenses incurred by rental property owners when raising eviction proceedings against a tenant are not allowed as a tax deduction to the property owner.

Posted on 12 September '16 by , under Tax.

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Transition to retirement

The transition to retirement (TTR) strategy allows you to access some of your super while you continue to work.

You are able to use the TTR strategy if you are aged 55 to 60. You can use it to supplement your income if you reduce your work hours or boost your super and save on tax while you keep working full time.

  • Starting a TTR pension: To start your TTR pension, transfer some of your super to an account-based pension. You have to keep some money in your super account so that you can continue to receive your employer's compulsory contributions as well as any voluntary contributions you may be making.
  • Government benefits and TTR: The benefits you or your partner receive might be impacted if you choose to opt for this strategy. How and what exactly will change might become clearer upon discussing this with a Financial Information Service (FIS) officer.
  • Life insurance and TTR: In some cases, the life insurance cover you have with your super may stop or reduce if you start a TTR pension – check this before making any decisions or changes.

TTR can help ease your mind as you transition into retirement but it can be a bit complex. Before you choose whether you want to use TTR to reduce work hours or save on tax, or even if you want to use TTR altogether, you should figure out how this will impact all aspects of your finances.

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