There are a couple of useful tax deductions worth knowing about. Chartered accountant GAIL FREEMAN explains how to claim them.

Costa had heard he could claim $1000 against his tax without any receipts, but others had told him it was only $300. 

He and Marielle wanted to know which was right.

“They both are!” I told them. 

“They apply in different years. I will look at last year first, and then the situation as it applies in the current year, which is quite different.

“In the year ended June 30 2026 you can claim $300 without receipts, but you must be able to justify the expenditure by diary notes or similar. “However, the $300 also includes laundry. So if you claim $150 for laundry, which is the maximum you can claim without substantiation, you only have $150 left out of the $300. 

“I often get asked how much someone can claim without receipts and, until June 30 2026, the answer was probably nothing. 

“However, now this new $1000 deduction comes into play, you have the choice of claiming either $1000 or, if your expenses are more, a higher amount.

“You do not need receipts to claim $1000, which you can do effective from July 1 2026. If you claim more than $1000, obviously you need receipts. The $1000 claim is great if your expenses are minimal.”

Marielle said: “It is good. I usually have about $5000 to claim as deductible expenses, whereas Costa only has about $500 to claim. He is not good at keeping receipts, so this will be great for him and, for me, it is business as usual.”

I said: “But it doesn’t end there. In addition to the $1000 without receipts Costa can also claim charitable donations, if he makes any, union and professional association fees, again if these are paid and lastly tax agent and investment management fees to the extent that they can be claimed. So this is a very generous claim that you can make going forward.

“Marielle, if the bulk of your claim is donations and investment management fees, as well as taxation fees, you may still be able to claim $1000 plus the additional items I have referred to above. It just depends on the break-up of your claim.

“It does not mean that you get $1000 back. It means you get a refund of your tax rate multiplied by $1000. So any refund is likely to be between $300 and $470.

“To be eligible for this deduction you need to receive salary and wages or director’s fees or a termination payment, and it even applies to parental leave pay.

“However if you don’t have any of these forms of income, you are not able to claim the deduction. If you earn business income and do not earn salary and wage income you cannot claim this.

“If you choose to claim your work-related expenses, which are less than $1000, then the $1000 is reduced and you get the difference as the deduction. The process is made even simpler because the $1000 will automatically be included in your 2027 tax return and you can choose whether or not to apply it.”

If you want information on the standard deduction or any other tax or superannuation related matter contact the expert team at Gail Freeman & Co Pty Ltd on 02 6295 2844, email [email protected] or visit gailfreeman.com.au

Disclaimer
This column contains general advice, please do not rely on it. If you require specific advice on this topic please contact Gail Freeman or your professional adviser. Authorised Representative of Lifespan Financial Planning Pty Ltd AFS Lic No. 229892.

News all day, every day at CityNews.com.au.