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Tax deductions that are often forgotten

A quick scan of the average taxpayer’s wallet of receipts or documents in the home office can result in quite a few expenses they can claim as tax deductions. However, some of the most obvious get forgotten on a regular basis.

While not all available tax deductions will apply for every individual (since claimable items vary based on the work they do and other personal circumstances), there are some frequently-used items professionals say people often overlook.

iPhones and iPads
Those who use their iPhone or iPad for work and have to pay for it may be able to claim a tax deduction for work-related data usage or calls. If their employer pays for their phone calls but they have purchased a cover for the phone or iPad to protect it, they may be able to claim that.

Electricity, internet and rent
Those who have a small business can claim a portion of their electricity bill, internet bill and even rent. Individuals can also claim depreciation on new computers, phones and printers up to the value of $300.  However, these tax deductions do not apply to people who work from home one day a week.

Driving expenses
Those who drive to see clients as part of their job can save on tax in that area. The two methods used to claim a deduction are cents per kilometre, where individuals can claim 66 cents per kilometre travelled, or through a log book. Individuals must keep receipts for petrol, insurance, registration, servicing and lease costs for the whole year.

Self-education courses
Those who have done a self-education course in the past year to improve their job skills can claim a tax deduction. However, if the reason a person does the course is because they’re sick of their current job and want to get a new one, they cannot claim a deduction.

Charity
Those who keep their receipts from donating to a registered charity can claim it as a tax deduction.

Posted on 24 May '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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