The top tax deductions you could be missing out on

With tax time fast approaching, the Australian Tax Office has warned it will be using sophisticated technology to spot dodgy claims.

But while the ATO is cracking down on bogus claims, there are many legitimate deductions workers are missing out on.

When it comes to tax time, accountant Melissa Browne says Australians are missing out on money they could be receiving and using to pay off their mortgage or credit card, or even go on holiday.

The top deductions many people overlook include working from home, claiming travel kilometres clocked for work, and mobile phone data is also deductible.

“We can claim a light and heat amount, remembering also we’re using the internet potentially from home, so it’s a percentage of that as well,” Ms Browne advised for those working from home.

“It’s [also] going to our calendar and actually remembering the many trips we took for work. Remembering as well that so many of us are paying tolls, particularly in Sydney.

“We’re using apps, we’re using email, we’re using calendar and we’re using so much more of it. It’s claiming the internet usage of our phone and the cost of our phone.”

A recent addition is potentially claiming a handbag for work that’s large enough to fit a laptop and a tablet in it – even sun protection, including sunglasses.

“If my foundation or moisturiser has an SPF factor in them – I could potentially claim my makeup,” Ms Browne added.

This year the ATO is keeping a close eye on wardrobe-related deductions following a 20 per cent surge in laundry and clothing claims over the past five years.

Those in the sharing economy – such as AirBnb and Airtasker – will need to declare all money they make and document their deductions.

Uber drivers would also need a logbook.

“If you are participating in ride-sharing, you are a GST registered business with an ABN, you’re going to need to keep records of the expenses you have keeping your car going,” Matt Prouse from Xero Online Accounting said.