Question 1

How does the work from home deduction at 67 cents per hour work for 2024-25?

Accepted Answer

For the 202425 financial year, if you work from home, you can claim deductions using the revised fixed rate method at 67 cents per hour. This rate covers the following expenses:

Electricity and gas for heating, cooling, and lighting
 Phone and internet usage
 Stationery and computer consumables

To use the 67 cents per hour method, you must:

Work from home while carrying out your employment duties (not just checking emails briefly)
 Have a dedicated workspace or a defined area set aside for

Question 2

How do I claim car expenses for work-related travel in Australia?

Accepted Answer

You can claim car expenses for workrelated travel in Australia, but not for ordinary commuting between your home and regular workplace. Workrelated car travel includes trips between different workplaces, travelling to meet clients, and carrying bulky tools that cannot be stored at work.

There are two methods to calculate your car expense deduction:

1. Cents per kilometre method:

Rate for 202425: 85 cents per kilometre
 Maximum claim: 5,000 business kilometres per car per year
 Maximum deduct

Question 3

What can I claim as deductions on an investment property in Australia?

Accepted Answer

If you own a rental investment property in Australia, you can claim a range of deductions against your rental income. These fall into immediate deductions and deductions spread over several years.

Immediate deductions (claimed in full in the year incurred):

Loan interest on the mortgage used to purchase the property (the largest deduction for most investors)
 Advertising for tenants
 Body corporate fees and strata levies
 Council rates and water charges
 Insurance premiums (landlord, building

Question 4

Can I claim self-education expenses as a tax deduction in Australia?

Accepted Answer

You can claim selfeducation expenses as a tax deduction in Australia if the education has a sufficient connection to your current employment. The education must either maintain or improve the specific skills and knowledge required for your current work, or be likely to result in an increase in your income from your current employment.

You CAN claim if the course:

Maintains or improves skills required in your current job
 Results in, or is likely to result in, an increase in income from your c

Question 5

Logbook method vs cents per km — which car deduction method is better in Australia?

Accepted Answer

There are two methods for claiming workrelated car expenses in Australia, and which is better depends on how much you drive for work and the running costs of your vehicle.

Cents per kilometre method: You claim a flat rate of 85 cents per kilometre for the 202425 income year (up from 78 cents in 202223), for a maximum of 5,000 kilometres per year per car. The maximum claim is therefore A$4,250. No receipts are required — you just need to be able to show how you calculated the business kilometres

Question 6

Home office deduction in Australia — actual cost method vs fixed rate method explained

Accepted Answer

From 1 July 2022, the ATO revised the home office deduction rules. There are now two methods: the revised fixed rate method (formerly called the 52cent method) and the actual cost method.

Revised fixed rate method (67 cents per hour from 1 July 2022): You claim 67 cents per hour for every hour you work from home during the income year. This covers electricity, internet, phone, and stationery. Importantly, you can also separately claim depreciation on home office furniture and equipment (compute

Question 7

How do I claim a partial deduction for phone and internet expenses in Australia?

Accepted Answer

You can claim a deduction for the workrelated portion of your phone and internet expenses. Because most people use their phone and internet for both personal and work purposes, you must apportion the expenses and only claim the workrelated percentage.

How to calculate the workuse percentage: The ATO expects you to keep a record for a representative fourweek period to determine your usual usage pattern. Track calls, data, and time spent on workrelated activities versus personal use. If your work

Question 8

Can I claim an immediate deduction for tools and equipment under $300 in Australia?

Accepted Answer

Yes. If you purchase workrelated tools or equipment that cost A$300 or less (excluding GST if you are registered for GST), you can claim an immediate deduction for the full cost in the year of purchase — no depreciation required.

Conditions for the A$300 immediate deduction:
 The item must cost A$300 or less
 You must use it predominantly (more than 50%) for work purposes
 The item must not form part of a set purchased together that together cost more than A$300 (you cannot split a set to get e

Question 9

Are union fees and professional memberships tax deductible in Australia?

Accepted Answer

Yes. Union fees and professional membership fees are generally tax deductible in Australia if they are directly related to your work and your employment in your current occupation.

Union fees: If you pay fees to a union or industrial association as an employee, the fees are deductible. The union must be registered under the *Fair Work (Registered Organisations) Act 2009* or equivalent state legislation. You can claim the deduction even if the union also provides some personal benefits (e.g. fun

Question 10

Are income protection insurance premiums tax deductible in Australia?

Accepted Answer

Yes. Income protection insurance premiums are generally tax deductible for Australian residents, provided the policy covers your income from employment or business activities and is not held inside your superannuation fund.

Deductible: Premiums on income protection policies held in your own name (outside of super) are deductible under section 81 of the ITAA 1997. This is because if you make a claim, the benefit payments you receive are assessable income — so the premiums are the cost of earning

Question 11

What is a rental property depreciation schedule and do I need one in Australia?

Accepted Answer

A depreciation schedule (also called a tax depreciation report) is a document prepared by a qualified quantity surveyor that outlines the depreciable assets in your investment property and the deductions you can claim each year for their decline in value.

Two types of depreciation you can claim:
 Division 43 (capital works/building allowance): This covers the structural elements of the building — walls, roof, flooring, windows, etc. For residential properties, you can claim 2.5% per year of the

Question 12

Is travel between work sites tax deductible in Australia?

Accepted Answer

Travel between work sites is generally deductible, but the rules differ significantly from travel between home and work, which is generally not deductible.

Deductible travel:
 Driving from one job to another (e.g. you work two jobs in one day and drive between them)
 Driving between different work locations for the same employer (e.g. visiting multiple client sites)
 Driving from your workplace to a client's office or a workrelated meeting and back
 Driving from home directly to a work site tha

Question 13

When is clothing and laundry deductible for work in Australia?

Accepted Answer

Clothing and laundry deductions are one of the most commonly misunderstood areas of Australian tax. The ATO is strict: ordinary work clothes are not deductible, even if you only wear them for work.

What IS deductible:
 Compulsory uniforms: Clothing that is distinctively designed (e.g. has a company logo) and is required by your employer as a condition of employment. Generic business attire — even if required — is not a uniform.
 Protective clothing: Clothing worn to protect you from the risk of

Question 14

What is the difference between Division 43 and Division 40 depreciation for rental properties?

Accepted Answer

Division 43 covers the capital works deduction, also known as the building allowance. This applies to the structural elements of a building: walls, floors, fixed plumbing, wiring, and so on. For residential properties, construction must have started after 17 July 1985. The deduction rate is 2.5% per year over 40 years. So a building that cost $400,000 to construct generates a $10,000 annual Division 43 deduction.

Division 40 covers plant and equipment items: assets that are removable or mechani

Question 15

Are private school fees tax deductible in Australia?

Accepted Answer

Private school fees are not tax deductible in Australia. School fees are a private expense and do not have a business or incomeproducing connection, so they cannot be claimed as a deduction on your tax return.

Uniform costs for school are also generally not deductible for the parent. The ATO allows deductions for clothing only when it is a specific occupational uniform or protective gear required for work, not school clothing.

The Education Tax Refund that existed until 2011 was abolished and

Question 16

What charitable donations are tax deductible in Australia?

Accepted Answer

To claim a tax deduction for a donation, the recipient must be a deductible gift recipient (DGR) approved by the ATO. Most registered charities with DGR status are included in the ATO's register. Common DGR categories include registered charities, public benevolent institutions, public hospitals, public libraries, and certain school building funds.

The donation must be a genuine gift: you must not receive anything of material value in return. Raffle tickets, gala dinner tickets, and auction pur

Question 17

Does the medical expenses tax offset still exist in Australia?

Accepted Answer

The net medical expenses tax offset (NMETO) was phased out and abolished from the 201920 income year onward. It no longer exists. If you spend large amounts on medical costs out of pocket, you cannot claim them as a deduction or tax offset on your federal tax return.

There is a limited carryover for a small number of disability aids, attendant care, and aged care expenses that were part of the old NMETO, but the general medical expenses offset for doctor, hospital, dental, and prescription cost

Question 18

Do mortgage offset accounts and redraw affect my tax deductions?

Accepted Answer

For an owneroccupied home, neither the offset account balance nor redraw have tax implications because mortgage interest on your home is not tax deductible anyway.

For an investment property, however, the interaction between offset accounts, redraw, and deductibility is significant. Interest is only deductible to the extent the loan was used to acquire or improve an incomeproducing asset. If you redraw money from your investment property loan for personal purposes (holidays, car, etc.), the int

Question 19

How does land tax work in Australia — state by state overview?

Accepted Answer

Land tax is a state and territory tax, not a federal tax, so rules, rates, and thresholds differ by jurisdiction. It applies to the unimproved land value of property you own, excluding your primary residence (principal place of residence) in most states.

Key thresholds and rates as at 2024 (approximate, check each state's revenue office for current figures): NSW has a threshold of $1,075,000 for individuals; VIC applies from $300,000 (surcharges apply); QLD threshold is $600,000 for individuals

Question 20

What depreciation can I claim on an investment property in Australia?

Accepted Answer

Investment property depreciation falls into two categories: capital works (Division 43) and plant and equipment (Division 40). Division 43 covers the structural components of the building at 2.5% per year for 40 years from when construction was completed. This applies to all residential investment properties built after 17 July 1985 regardless of when you purchased them.

Division 40 covers removable items such as carpets, blinds, dishwashers, ovens, air conditioning systems, and hot water syste

Question 21

Is there still an education tax refund in Australia?

Accepted Answer

The Education Tax Refund (ETR) was abolished with effect from the 2012 income year. It was replaced by the Schoolkids Bonus, which was itself abolished in 2016. There is currently no federal tax offset, rebate, or refund for schoolrelated expenses such as textbooks, stationery, computers, or uniforms.

This means that primary and secondary school education costs for your children, including private school fees, tutoring, computers bought for school use, and uniforms, are not deductible or refund

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Deductions Tax Questions & Answers