ITR - Deduction Notes -ATO FY 2022 -2023

D1 - Work-Related Car Expenses

Work-related car expenses are expenses you incurred as an employee for a car you owned or leased or hired under a hire-purchase agreement.

Two Methods

1. Cents per kilometer method ($0.78 Per Km, can claim Maximum up to 5000km)

Or 

2. Actual Logbook method. (Which Include Electronic or Pre-printed logbook, Evidence of your Actual fuel, Oil costs, Odometer readings, other car expenses like Car Repairs and Car Insurance etc. & can claim depreciation for the motor vehicle)

D2- Work-related travel expenses

Travel expenses you incur in performing your work as an employee

1. Public transport, air travel and taxi fares

2. Bridge and road tolls, parking fees and short-term car hire

3. Meal, accommodation and incidental expenses you incur while away overnight for work

4. Expenses for motorcycles and vehicles with a carrying capacity of one tonne or more, or nine or more passengers, such as utility trucks and panel vans

5. Actual expenses, such as petrol, repair and maintenance costs, that you incur to travel in a car that is owned or leased by someone else

D3- Work-related clothing, laundry, and dry-cleaning expenses

1. Protective clothing and footwear 

2. Uniforms (Compulsory Uniform & Non-Compulsory Uniform)

3. Occupation-specific clothing

4. Laundering and dry-cleaning of the above three.

D4 Work-related self‑education expenses

1. Course maintained or improved a skill or specific knowledge required for the current work activities, or

2. The course was leading to, or likely lead to, increased income from your current work activities, or

3. A course that has a direct connection with current work activities.

D5 - Other work-related expenses

Other work-related expenses are expenses you incurred as an employee and not claimed anywhere else on your tax return.

Whichever is Higher can claim under D5 - Other Work-Related Expenses

1. Actual Cost Method 

2. Fixed Rate Method 

1. Actual Cost Method (Based on Actual Expenses Incurred)

1. Depreciation of Office Equipment (Laptop, Computer, Keyboard)

2. Depreciation of Office Furniture (Desk, Chair, TV, Table)

3. Asset Cost Less than $300 

4. Union fees and Subscriptions fees to trade, business or professional associations

5. Work From Home Expenses (Telephone, Internet, Printing Stationary,)

6. Electricity and Gas

7. Overtime meal expenses

8. Professional seminars, courses, conferences, and workshops

9. Reference books, technical journals, and Trade magazines

10. Safety items such as hard hats, safety glasses, sunscreens, and other protective items due to COVID-19

Note: 

1. If Work Related Asset cost less than or Equal to $300 dollars, then you can claim an immediate deduction for the full cost of depreciating assets.

2. If Work Related Asset costs more than $ 300, then add to Asset Register and apply Depreciation Percentage as Per ATO Depreciation Rate 2022 and then claim depreciation.

2. Fixed Rate Method

1. $0.67 Dollar Per Hour × Actual Working Hours

2. IF Actual Working Hours Details Not Given then consider Maximum ($0.67 Dollar × 48 weeks × 5 Days × 8 Hours)

3. In addition to Fixed Rate 

1. Eligible to Claim 

• Depreciation of Office Equipment (Laptop, Computer, Keyboard)

• Depreciation on Office Furniture (Desk, Chair, TV, Table)

• Work From Home Expenses (Telephone, Internet, Printing stationery)

2. But Not Eligible to Claim

• Electricity and Gas

D6 - Low-Value Pool Deduction

Low-Value Pool Deduction Means

Claiming a deduction for the decline in value of low-cost and low-value assets that you used in the course of producing income.

1. Depreciating Assets that cost less than $1000 after deducting any GST credits called Low-Cost Assets

2. Depreciation assets that are not low-cost assets but written down value of assets as on 01/July/2021 as per diminishing balance method less than $ 1000 called Low-Value Assets

3. So Low-Cost Assets and Low-Value Assets are called Low-Value Pool Deduction

Example 1: Emil bought a printer for $600 in 2021–22. Emil uses this printer for Personal purposes 60% for Office purposes 40%

Example 2: Emil previously claimed deductions under the diminishing value method for a laptop that he purchased for $1,500. The laptop's opening adjustable value on 1 July 2021 was $900.

Solution for Example 1 & 2

Notes: If you claim a deduction to the asset under D6 then don’t calm deduction under D1 to D5 

D7- Interest Deductions

Expenses include:

1. Bank or other financial institution account-keeping fees for accounts held for investment purposes

2. Fees for investment advice 

3. The interest you paid on money you borrowed to purchase income-producing investments.

D8 - Dividend Deduction

1. Fees for investment advice (Portfolio Agent Fees etc.)

2. Interest paid on money borrowed to purchase shares or similar investments (Can get from ABN lookup)

3. Costs relating to managing your investments, such as travel and buying specialist investment journals or subscriptions.

D9 - Gifts or donations

1. You can claim a Gift or donation of $2 or more to an approved organization

2. Generally, you cannot claim a deduction for a gift or donation if you received something in return

To check an Approved organization, use this website https://abn.business.gov.au/

D10 - Cost of managing Tax Affair

1. Interest charges by ATO

2. Preparing and lodging your Tax return and Activity statements

3. Fees paid to a recognized tax adviser for preparing and lodging your tax return (Tax Agent Fees)

4. Litigation costs (including court and Administrative Appeal, Tribunal fees, and other legal costs you incurred in managing your tax affairs)

5. Travel to obtain tax advice from a recognized tax adviser

6. Buying tax reference material

7. Dealing with us about your tax affair

Notes: Tax Agent Fees Deductible on Payment basics (Cash Method only) Previous FY Tax Agent Fees will pay in the Current Year.

D11 - Deductible amount of undeducted purchase price (UPP) of a foreign pension or annuity

1. If you showed income from a foreign pension or annuity under Label 20, You are eligible to Deduct, UPP of foreign pension or annuity under Label D11.

2. Undeducted purchase price (UPP) is the amount you contribute towards the purchase price of your foreign pension or annuity.

D12 - Personal Super Annuation

Refer Page No - 20

1. Claiming Deduction under D12 Personal Super Annuation Contribution

There are limits on how much Deduction you can claim.