What Can I Claim on My Tax Return 2026: Deductions & Tips

Tax time usually starts the same way. You open your inbox, see reminders from the ATO, glance at a shoebox of receipts or a messy downloads folder, and ask the question almost every Australian asks: what can I claim on my tax return?

You don’t need more noise. You need a simple way to sort real deductions from wishful thinking. That matters whether you’re a PAYG employee in Ashfield, a tradie on the Northern Beaches, a sole trader in Belrose, or an investor juggling rental property paperwork.

My view is straightforward. Stop chasing random deduction lists from social media. Learn the rules first. Once you understand the ATO’s logic, you can test almost any expense properly and avoid the classic mistakes that trigger stress, amendments, or awkward audit conversations.

Navigating Tax Time Without the Headache

A lot of taxpayers come in thinking tax is about spotting every possible deduction. It’s not. It’s about claiming the right deductions, with the right evidence, in the right way.

That’s why broad checklists only get you halfway. One cleaner can claim an item that another cleaner can’t. One nurse can deduct a cost that another nurse can’t. The difference usually comes down to how the expense connects to income, whether the person paid for it themselves, and whether they kept records.

If you’ve been searching “what can I claim on my tax return”, start with a better question: why would the ATO allow this claim at all? That shift changes everything. It stops guesswork and gives you a framework you can use.

For a plain-English overview of common tax breaks, Everglow Prosperity’s tax guide is a useful starting point. Read it as a prompt, not a permission slip. The actual work is applying the rules to your own facts.

Why people get stuck

Most confusion comes from three pressure points:

• Mixed-use expenses like internet, phone, and car costs. Part work, part private.
• Work myths passed around job sites, lunchrooms, and family chats.
• Poor record-keeping that turns a valid claim into a weak one.

The best tax return isn’t the one with the biggest deduction list. It’s the one you can defend calmly if the ATO asks questions.

Good tax advice should lower anxiety, not add to it. When clients walk into an accountant’s office in Ashfield or Belrose, they usually want the same thing. Certainty. They want to know what’s fair, what’s risky, and what records they should keep from now on.

The Three Golden Rules of Tax Deductions

You buy something because work clearly required it. At tax time, you assume it should be claimable. Then the ATO asks a different question. Why does this expense belong in your return at all?

That’s the right lens. The three golden rules are the ATO’s logic. Learn them once and you can test almost any expense, whether you’re a tradie buying tools, an investor paying for advice, or a sole trader sorting out mixed business and private costs.

The short version is simple. You can usually claim an expense only if it has a real connection to earning your income, you paid for it yourself, and you kept records.

Rule One. Incurred for work

Start here every time. If the expense is not tied closely enough to the income you already earn, stop.

The ATO cares about the connection between the cost and your current income-producing activities. A chippy buying steel-cap boots for site work has a stronger claim than an office worker buying black shoes. A nurse doing training required for her current role is in a stronger position than someone studying to move into a different career.

Private costs stay private, even if work is part of the story. The classic example is travel from home to your regular workplace. Plenty of people still try to claim it. It is usually private and usually denied.

Mixed-use costs need extra care. Phone, internet, car use, and home office expenses often sit in the grey area because part of the expense is work and part is private. You can claim the work-related share only. If you need the detail on methods and records, read this working from home tax guide.

Rule Two. You paid for it yourself

This rule knocks out a lot of claims.

If your employer reimbursed you, you do not get a deduction. If the business paid the supplier directly, you do not claim it in your personal return. If you split the cost with someone else, you claim only your share.

Use a blunt test. Did the money leave your pocket and stay out of your pocket? If not, do not claim it.

This catches employees all the time. They buy something for work, see the transaction on their account, then forget payroll paid them back later. It also catches directors and sole traders who mix personal and business spending and then claim the full amount without checking who really bore the cost.

Rule Three. Proof is everything

A valid expense with no evidence is still a weak claim.

The ATO expects records that show what you bought, when you bought it, who supplied it, and how much you paid. For many deductions, that means written evidence such as receipts, invoices, bank records, and diary entries where required. The TurboTax summary of substantiation requirements gives a plain-English overview, but always apply Australian tax rules to your own facts.

Good records do more than support the claim. They help you apportion mixed-use expenses properly and avoid the lazy habit of guessing. Guessing is what gets people into trouble.

The law behind the rule

The legal starting point is section 8-1 of the Income Tax Assessment Act 1997. That section sets the framework for general deductions. Then you apply any specific ATO guidance and substantiation rules for the type of expense you are dealing with.

Use this quick test before you add anything to a return:

Practical rule: If an expense fails even one of these three rules, leave it out. Hope is not tax law.

Key Deductions for Employees and Individuals

You sit down on a Sunday night to sort your tax return. A few receipts are in your wallet. A couple are buried in your email. You know you spent money for work, but you are not sure what the ATO will accept.

That’s the point where people either guess or apply the three golden rules properly. Guessing creates weak claims. Applying the rules gives you a clear answer.

For employees and individuals, the best claims usually sit in a handful of categories. Working from home. Self-education tied to your current job. Uniforms, protective clothing, and tools you paid for yourself. The list matters, but the ATO’s logic matters more. If you understand why an expense qualifies, you can judge new expenses without relying on tax-time myths.

Working from home claims

Take Sarah, a marketing manager in Sydney who works from home several days a week. She uses her laptop, phone, internet, electricity, and a desk set up for her job.

Her claim has to match her records and her actual work use. If the same internet connection is used for family streaming, schoolwork, and personal browsing, only the work-related share belongs in the return. That split needs to be reasonable and supportable.

Plenty of employees come unstuck here because they claim broad household costs without showing the work connection or the private portion. The ATO does not care what feels fair. It cares what you can show. For a plain-English breakdown of methods and record keeping, see this working from home tax guide.

What usually counts

• Phone and internet use to the extent it relates to your job.
• Stationery and office consumables used for work.
• Equipment costs for items used to earn your employment income.

What usually fails

• Claiming the full bill when the item is also used privately.
• Rough estimates with no diary, invoice, or other basis.
• General household costs with no direct work link.

If your calculation starts with “about half”, stop and work it out properly.

Self-education expenses

Now look at Daniel, a teacher in the Inner West. He pays for a course that improves skills he already uses in the classroom.

That kind of expense can be deductible because it relates to the income he earns now. A course taken to move into a completely different career is a different story. That is where people overclaim.

Use a blunt test:

1. Does the study relate to your current role?
2. Does it maintain or improve the skills you use at work now?
3. Did you pay for it yourself and keep the evidence?

If the answer is yes across the board, the claim is on firmer ground. If the course is really about your next job, leave it out unless you have very clear advice.

Uniforms, protective clothing and tools

This area sounds simple, but it traps a lot of people.

Priya is a nurse. She buys non-slip shoes for shift work and also buys plain black pants worn on shift. The shoes may be claimable if they are protective and connected to her work conditions. The black pants usually are not. Plain clothes do not become deductible just because your employer expects a certain colour.

The same rule applies to tools and equipment. A tradie employee in Belrose who buys a drill used directly on jobs may have a solid claim. Someone buying a general household item that gets occasional work use has a much weaker position. The work connection has to be clear, and the private use has to be accurately accounted for.

Good habits for clothing and tool claims

• Keep receipts as you go, not at year end.
• Make a short note of the work purpose while you still remember it.
• Separate work purchases from private ones where possible.

Quick employee examples

Use the three golden rules on common expenses and the answer is usually straightforward.

A realistic view on employee claims

If you are an employee, your claim is usually narrower than you hoped and simpler than social media makes it sound. The ATO is focused on direct income-producing costs. Not lifestyle spending. Not costs your employer reimbursed. Not private expenses dressed up as work items.

That is why two people in the same job can lodge very different returns. One paid the expense personally, used it for work, and kept records. The other did not. The rule is not complicated. If an expense does not satisfy the three golden rules in real life, do not claim it.

Maximising Vehicle and Travel Claims

Vehicle claims create more bad tax returns than almost any other area. People mix up commuting with deductible travel, forget to keep evidence, or choose a method without understanding what it means.

For many workers and tradies, the starting line is simple. Travel between home and your regular workplace is usually private. Travel between job sites, between workplaces, or for income-producing trips can be a different story.

Two ways to claim car expenses

Here’s the side-by-side comparison most taxpayers need.

The infographic above captures the broad difference. If you want a fuller explanation of vehicle deduction rules, methods, and records, use this vehicle tax deductions guide.

A Belrose tradie example

Say you’re a tradie based in Belrose and you drive from one client site to another through the day. You also buy fuel, pay rego, insurance, servicing, and use the ute heavily for work.

In that situation, the logbook method is often worth serious consideration because it tracks your actual business-use percentage. It takes more effort, but for taxpayers with substantial work use and significant running costs, it can produce a more accurate result than a simplified shortcut.

If your work car use is more occasional and your records are thin, the cents per kilometre approach may be easier to manage. Easy isn’t always better, but it’s better than claiming badly.

Travel claims people should stop making

• Home to regular workplace trips claimed as if they’re business travel.
• Round-number kilometre estimates with no diary, calendar, or supporting record.
• Full vehicle costs when the car is also used privately.

Keep a record as you go. Rebuilding a year of car use from memory is where good intentions turn into weak evidence.

Deductions for Investors and Rental Property Owners

Investors ask a different version of the same question. Not “what can I claim on my tax return” as an employee, but what expenses directly relate to earning investment income.

For rental property owners, the headline issue is usually classification. Some costs are immediately deductible. Others must be treated differently because they improve the property rather than restore it. If you get that wrong, your return can be wrong even if the dollars are real.

Repairs versus improvements

A repair generally restores something to its previous condition. An improvement makes it better, bigger, or more valuable.

That distinction matters. Replacing a broken element with a like-for-like fix may sit in one category. Upgrading or substantially improving an area of the property may sit in another. Landlords often blur the line because both involve trades, invoices, and property costs. The tax treatment isn’t the same.

For a plain-English overview of landlord asset treatment and timing issues, this guide to depreciation rules for landlords is a useful companion read.

Common rental property claim areas

• Interest on investment borrowings where the loan relates to the income-producing property.
• Council rates and agent fees connected to managing the rental.
• Repairs and maintenance where the expense restores rather than improves.
• Other property costs that relate to earning rental income and are properly documented.

If you want a more detailed breakdown of rental categories and treatment, see this rental property tax deductions guide.

Share investors and managed investments

Share investors can also incur deductible holding costs in the right circumstances. Common examples may include management fees, certain investment advice costs tied to managing existing income-producing investments, and financial publications where there is a clear income-producing purpose.

The key is still connection and apportionment. If the advice partly relates to private wealth planning or non-deductible capital matters, you can’t just throw the whole invoice into the return.

Crypto and capital gains need care

Cryptocurrency, share disposals, property sales, and other capital gains issues aren’t DIY territory if your records are messy or your transactions are layered. You need dates, purpose, acquisition history, and clean evidence.

That’s where taxpayers lose time and create avoidable amendments. If your investment activity moved beyond a simple salary-and-wages return, treat tax as a record-keeping exercise first and a deduction exercise second.

Essential Claims for Sole Traders and Small Businesses

It is 8:30 pm in Ashfield. You have finished the day’s work, opened your bookkeeping app, and you are staring at a pile of transactions that all looked “business-related” at the time. New tools, a phone bill, software, fuel, insurance, a coffee bought during a supplier meeting. This is the point where sole traders and small business owners either claim properly or make expensive mistakes.

The ATO does not care that you were busy. It cares whether you can show why the expense was incurred, how it helped you earn business income, and what private use you have stripped out. Same three golden rules. Bigger volume. Bigger risk if your records are messy.

A business usually has more legitimate deductions than an employee. It also has more grey areas.

Take a small creative agency in Ashfield. It pays for design software, web hosting, digital ads, public liability insurance, bookkeeping, phone services, and office supplies. Those are ordinary operating costs of running the business, so they are usually deductible if the records are clean and the expense is not private or capital in nature.

For sole traders and small businesses, the claims that come up most often include:

• Rent and premises costs for commercial space used in the business
• Phone, internet, and utilities used for business, with private use excluded
• Advertising and marketing such as website costs, online ads, signage, and printed materials
• Software and subscriptions used to operate the business
• Professional fees for accounting, bookkeeping, legal work, and compliance support
• Business insurance tied to the business activity
• Tools, equipment, and supplies used to do the work and earn income

Asset purchases need a separate check.

A lot of owners buy a laptop, ute accessory, power tool, coffee machine for the office, or new furniture and throw it all into “expenses”. That is lazy bookkeeping, and it causes trouble. Some purchases can be claimed straight away under current rules. Others must be claimed over time. The answer depends on what you bought, when you bought it, how it is used, and which tax rules apply to your entity.

Do not rely on something you heard from another business owner six months ago. Tax treatment for assets is rule-based, not pub-based.

Mixed-use spending is where many small businesses come unstuck. If you use one phone for work and family, claim the business portion only. Same for home internet, a laptop shared with the household, or a vehicle used for both jobs and personal errands. If you cannot show your split, your claim is weak.

My advice is simple. Separate business and private spending early, not at lodgement time.

Use this checklist before you lodge:

1. Keep business purchases separate from private spending wherever possible.
2. Store invoices and receipts in one place so you can match them to bank transactions.
3. Review recurring charges and cancel anything that no longer relates to earning income.
4. Check each asset purchase on its own instead of dumping everything into one expense category.
5. Match your accounts to your bank records so income and expenses are complete and not duplicated.

If you need help with individual returns, business structures, BAS, SMSF compliance, crypto tax issues, or ASIC-related company secretarial work, EndureGo Tax provides those services for clients in Ashfield, Belrose, and surrounding areas.

Common Mistakes and When to Call the Experts

You sit down to lodge, open your banking app, and realise half the year was paid from the wrong card, the car logbook stopped in March, and that “work expense” was partly private. That is how ordinary tax problems start. Not with fraud. With messy habits.

The ATO’s logic is simple. If you did not spend the money yourself, if it was not tied to earning income, or if you cannot prove the work-related portion, the claim is weak. Those three rules catch most tax return mistakes before the ATO does.

A common trouble spot is the line between private and work use. Phone plans, home internet, laptops, cars, and travel are all claimable only to the extent they relate to earning income. The ATO keeps a close eye on these areas because people regularly overclaim them, and poor records make a bad situation worse, as noted in this overview of tax deductions.

The mistakes I see most often

• Claiming private expenses because they happen around work, not because they are required for work.
• Claiming expenses that were reimbursed by an employer or paid back another way.
• Guessing the work-related split for car, phone, internet, or home office costs.
• Keeping weak records that do not clearly show the supplier, date, amount, and business purpose.
• Treating capital improvements as repairs on rental properties or business assets.
• Forgetting the three golden rules and claiming based on habit, not evidence.

When professional help makes sense

Get advice before you lodge if any of these apply:

There is no reward for lodging a complicated return the hard way.

If your return is clean, simple, and backed by proper records, you can usually handle it yourself. If your facts are mixed, your paperwork is patchy, or you are dealing with property, CGT, business income, crypto, or an ATO review, pay for advice. You are paying for judgement, clean reporting, and fewer expensive mistakes.

EndureGo Tax helps individuals, tradies, investors, and small businesses in Ashfield, Belrose, the Inner West, and the Northern Beaches with deductions, records, capital gains, BAS, and compliance.