Maximise Your Tax Return - Part 2

Disclaimer:  We do not provide tax or accounting advice. This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for tax or accounting advice. You should consult your own tax and accounting advisors before engaging in any transaction.


Most of us are excited when it comes to tax time not because we like it but rather we are looking forward to a much anticipated refund if we have any. However, most of us are missing out on how to take advantage of boosting our refunds due to either not knowing it or simply being disorganized.

In the Philippines, we do not have this unless you own a business. Tax minimisation is an ethical and legal way of reducing your taxes. You're making use of your tax benefits to lower your taxes. So what are the ways that we can actually do this?

πŸ“Œ Before you get excited, not all can make a claim. You need to meet the criteria set by ATO - it must be directly related to earning your income, you must have spent the money yourself and not reimbursed and not contrary to law. Most importantly, πŸ‘Œyou must be able to show ATO how you calculated the claim.

πŸ“ŒYou may be liable to penalties for making false or misleading statements or taking a tax position that is not reasonably arguable. The penalty will not be imposed if either of the following apply:

  • you took reasonable care in making the statement (but you may still be subject to another penalty provision, such as taking a position that is not reasonably arguable)
  • your statement accords with our advice, published statements or general administrative practices in relation to a tax law.
Under the safe harbour provisions, you may not be penalised if the incorrect statement was made by your agent when you provided them with the relevant, correct information. 


πŸ‘‰ Track and Claim All Allowable Deductions

Tax deductions are the most common way of doing it. If you check the paper form, you can refer it under the D section:



πŸš— D1 - D2 Work related car and travel expenses


If you use your car or travel as part of your job then you'll be able to claim it. However, trips between home and work are not. 

You can claim the cost of travelling:
  • directly between two separate workplaces - for example, when you have a second job (if one of these places isn't your home)
  • from your normal workplace to an alternative workplace that is not a regular workplace (for example, a client's premises) while still on duty and back to your normal workplace or directly home
  • if your home was a base of employment - you're required to start your work at home then travel to a workplace to continue your work for the same employer
  • if you had shifting places of employment – you regularly work at more than one site each day before returning home
  • from your home to an alternative workplace that is not a regular workplace for work purposes, and then to your normal workplace or directly home (this doesn't apply where the alternative workplace has become a regular workplace)
  • if you need to carry bulky tools or equipment that your employer requires you to use for work but you can't leave at your workplace (for example, an extension ladder or a cello) – the tools or equipment are bulky, meaning that because of the size or weight they are awkward to transport and can only be transported conveniently by motor vehicle.
Transport expenses can include the cost of driving your car, ride-share (such as Uber) and ride-sourcing, flights or catching a train, taxi or bus. For other travel expenses that you can claim - https://www.ato.gov.au/individuals/income-and-deductions/deductions-you-can-claim/vehicle-and-travel-expenses/other-travel-expenses/

You cannot claim the following:
  • you do minor work related tasks - for example, picking up the mail on the way to work or home
  • you have to drive between your home and your workplace more than once a day
  • you are on call – for example, you are on stand-by duty and your employer contacts you at home to come into work
  • there is no public transport near where you work
  • you work outside normal business hours – for example, shift work or overtime
  • your home was a place where you ran your own business and you travelled directly to a place of work where you worked for somebody else
  • you do some work at home.
There are two ways on how to make a claim:
  • Cents per km - maximum of 5,000 per km (Code Claim Type: S)
  • Logbook method - must cover at a minimum 12 continuous weeks (Code Claim Type: B)

🦺πŸ₯ΎπŸ‘“ D3 Work related uniform, occupation specific or protective clothing, laundry and dry cleaning expenses

You can claim deductions if it is:
  • protective in nature - including safety boots and sun protection (Code Claim Type: P)
  • a compulsory uniform such as corporate uniform with the company's logo (Code Claim Type: C) 
  • a non-compulsory uniform registered by the employer. (Only designs of uniforms or wardrobes which are not protective clothing, occupation specific clothing or compulsory for an employee to wear while at work, need to be registered.) (Code Claim Type: N)
  • occupationally specific, such as the clothing worn by chefs and nurses but (according to the tax office), not waiters (Code Claim Type: S)
If the clothing is allowable as a tax deduction, it follows that the cost of maintaining and cleaning that clothing will also be allowable.

If you are unsure of what to claim, ATO has a guideline for specific industries and occupations. https://www.ato.gov.au/Individuals/Income-and-deductions/Occupation-and-industry-specific-guides/?=redirected_occupations

How to claim:

You must keep your receipts to be able to show how you came up with the claim. 

If your laundry expenses are $150 or less, you can claim the amount you incur on laundry without providing a written evidence. This is even if your total claim for work related expenses is more than $300 which includes your laundry expenses. However, if your total claim of your work related expenses is more than $300, you must have written evidence of it. You need to be able to show how you came up with the total of your laundry expense claim.

If you do it yourself, a reasonable basis for computing it is:
  • $1 per load - this includes washing, drying and ironing - if the load is made up only of work related clothing
  • 50 cents per load if other laundry items are included

πŸ“š D4 Work related self-education expenses

Continuous learning is a key to professional development and studying an online course is an amazing incentive in helping you build on skills and knowledge that can progress your career. 

But before you include these expenses to your taxes, πŸ“Œmake sure that the course you'll take is directly connected in your current profession, business or employment. According to ATO, you must satisfy one of the following conditions:
  1. upgrading your qualifications for your current role. (Code Claim Type: O)
  2. improving your skills or knowledge used in your current role. (Code Claim Type: K)
  3. a trainee and the course you take forms part of the traineeship. (Code Claim Type: O)
  4. able to show the course you were taking led to, or was likely to lead to, an increase in your current salary. (Code Claim Type: I)
You can't claim a deduction for a course that doesn't have a sufficient connection to your current work activities even though it:
  • might generally related to it - such as undertaking a full-time fashion photography course and working as casual sales assistant on the weekends
  • enables you to get new employment - such as moving employment as a nurse to employment as a doctor
For more information, https://www.ato.gov.au/Individuals/Income-and-deductions/Deductions-you-can-claim/Self-education-expenses/

πŸ“ŒYou cannot claim deductions for expenses incurred in actively seeking paid work if you receive Newstart/Jobseeker or Youth allowance.

πŸ˜πŸ“ D5 Other work related expenses

Other work-related expenses are expenses you incurred as an employee and have not already claimed anywhere else on your tax return. These include:
  • union fees and subscriptions to trade, business or professional associations
  • certain overtime meal expenses
  • professional seminars, courses, conferences and workshops
  • reference books, technical journals and trade magazines
  • the work-related portion of safety items such as hard hats, safety glasses, sunscreens and other protective items due to COVID-19
  • the work-related portion of some computer, phone and home office expenses
  • the work-related portion of tools and equipment and professional libraries (you may be able to claim an immediate deduction for the full cost of depreciating assets costing $300 or less.

πŸ’΅ D9 Gifts or donations

While contributing to a cause that you are passionate about, it can also help improve your refund. Donations that are $2 or more are tax deductible but ensure the organisation has a DGR (deductible gift recipient) status.

You can check the DGR status of an organisation here http://www.abn.business.gov.au/Tools/DgrListing.

πŸ—ƒ D10 Cost of managing tax affairs

The cost of managing your tax affairs includes:
  • interest charges ATO imposed on you
  • litigation costs (including court and Administrative Appeals Tribunal fees, and solicitor, barrister and other legal costs you incurred in managing your tax affairs)
  • other expenses you incurred in managing your tax affairs, including:
    • preparing and lodging your tax return and activity statements
    • fees paid to a recognised tax adviser for preparing and lodging your tax return πŸ‘Œ
    • travel to obtain tax advice from a recognised tax adviser πŸ‘Œ
    • buying tax reference material πŸ‘Œ
    • dealing with us about your tax affairs.
You can also claim any costs you incurred in complying with your legal obligations relating to another person’s tax affairs.

You cannot claim:
  • the cost of tax advice given by a person who is not a recognised tax adviser
  • a deduction for tax shortfall and other penalties for failing to meet your obligations.
D15 Other deductions

May include the following:
  • Income protection, sickness and accident insurance premiums
  • Expenses related to income earned from the sharing economy or other marketplace which is not derived from carrying on a business or as an employee of the digital platform
  • Others
πŸ‘‰ Topping-up Your Super

Isn't it amazing that you've got to score tax savings while building your retirement fund.

A personal super contribution is a contribution you make to your super fund 'after tax'. This is different from those of your employer contributions or salary sacrifice you've set. Before, you needed to be self-employed to claim it. However, from 1 July 2017, most people, regardless of their employment, will be able to claim a full deduction for personal contributions they make until they turn 75.

If you wish to claim a tax deduction for personal contributions, you must have:
  • made the personal super contributions to an eligible super fund
  • given your super fund a valid Notice of Intent to claim or vary a deduction for personal contributions form by the earlier of > the day you lodge your tax return for the year in which you made the contributions or > the end of the income year following the one in which you made the contributions
  • received written acknowledgement of the Notice of Intent from the super fund
Personal contributions claimed as a deduction will be taxed at 15% and will also count towards your concessional contributions cap of $25,000 (FY2020). Also, it will not be eligible for the government co-contribution (You can claim part of it to be eligible for the co-contribution).

πŸ‘Œ If you are a low or middle-income earner and maker personal (after-tax) super contributions to your super fund, the government also makes a contribution (called a co-contribution) up to a maximum amount of $500. For more information, https://www.ato.gov.au/Individuals/Super/In-detail/Growing-your-super/Super-co-contribution/?anchor=Eligibilityforthesupercocontribution#Eligibilityforthesupercocontribution

πŸ‘Œ If you make contributions to a complying super fund or a retirement savings account on behalf of your spouse (married or de facto) who is earning a low income or not working, you may be able to claim a tax offset. (*The contributions must not be claimed as a tax deduction or as the basis of the government co-contribution, thus explicitly excluding split contributions. Spouse income should be below $40,000 too.)

πŸ‘‰ Capital Gains/Losses

Capital gains tax in Australia is not a separate tax; it will be added to taxable income and taxed at marginal rate. Hence, there is no capital gains tax rate unlike in the Philippines.

So if you make a capital loss, you can't claim it against your other income but you can use it to reduce a capital gain (Net capital losses carried forward to later income years).

You can generally discount a capital gain by 50% if they hold the asset for more than one year.


πŸ‘‰ Insurances

For those who have a private health insurance, you can claim a rebate to help towards the cost of your private health insurance premiums. The rebate is income tested so this depends on your income for surcharge purposes. (Note: Ensure it is an appropriate level of private hospital cover. 'Extras' like optical, dental are not private patient hospital cover. For singles, an appropriate level of cover must have an excess of $750 or less. Couples or families must have an excess of $1,500 or less.) Below is a sample statement from your provider. You just follow the letters - B, name of provider; C, insurer ID; J- premiums paid etc.


The ATO allows you to claim the costs of your income protection premiums for policies taken out separate to your Super.

Your provider will send it directly to ATO and will also notify you about it. They'll be sending the statement showing how much you paid and how much you can claim. If you want to lodge early and this has not been prefilled yet, you can call your provider about it.

πŸ‘‰ Other Expenses

If you have other investments, you can deduct bank fees, financial advisor fees, interests etc. as long as the income earned is included as part of the assessable income and the expense is not private in nature.

"Negative gearing". For those who want to create rental income. It has some tax benefits but you should seek professional advice to determine if it's right for you. I was excited when I heard this but for now, a pass for me. 😊


The above-mentioned is not an exhaustive list of everything you can claim or not claim so be sure you speak to a professional or you can refer to the ATO for further information.



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