A tax deduction does not mean the government refunds the entire purchase price. Instead, a deduction lowers your taxable income, meaning you only save the amount of tax you would have paid on that money.
Claiming deductions and offsets can be very confusing for new arrivals and is where most in their 1st year in work get it wrong. You will hear the phrase “Just claim it on tax” about purchases, which will give you the impression that if you spend $280 on a something, then after your tax claim is complete you will see the whole $280 come back. WRONG!
As per the cut and pasted internet search statement above, you will only get the tax portion back relative to your tax rate by reducing your overall income. I went nuts in my first year, new everything. I was thinking I might as well buy it with put aside holiday money as I would get it all back! Right?
My tax return slapped me for not researching correctly. To the tune of thousands. The trip to Fiji I promised my partner once the holiday pot was replenished by tax refund money never happened!
My tip, create a document where you can track your purchases as you make them and keep receipts. If you’re paying through Gpay or banking app there will often be on the statement for example:
There is no perfect way to keep details, I’m tech poor and do what works for me. If my tax agent doesn’t understand something i’m claiming for or its lacking evidence they will call to discuss it. They may advise I don’t claim that item. I also use my tracker to remind me of things to claim that aren’t widely known or I find during my research into annual changes.
Online tax claim research will get you so far but using a tax agent will get you further. If you or your dependants buy something for your work with your individual bank account, joint bank account and you have the receipt, claim it.
Item’s such as: