Are you sure you’re claiming every dollar you’re entitled to at tax time? Thousands of Australians unknowingly leave money on the table every year simply by missing out on legitimate tax deductions. This guide goes beyond the obvious claims to uncover the ones you might be overlooking.

We’re here to give you practical, accountant-grade advice that lines up with ATO rules, helping you boost your refund without the audit anxiety. Before we dive in, let’s cover the three golden rules for any deduction. The ATO is crystal clear on this: you must have spent the money yourself, the expense has to be directly tied to earning your income, and you need the records to prove it.

Getting this right is the foundation of a solid tax return and can significantly impact your tax refund.

Here’s a quick overview of our ATO tax deduction tips:

• Discover 10 commonly missed deductions to maximise your 2026 tax return.
• Understand the strict ATO substantiation rules for each claim.
• Learn how to claim WFH, car, and self-education expenses correctly.
• Avoid common mistakes that can trigger an ATO audit.
• Follow our checklist to lodge with confidence.

The 3 Golden Rules of Tax Deductions

Before we get into the specifics, understanding these basics is the key to avoiding common mistakes that trigger an ATO audit. For any work-related expense to be considered a valid deduction, it must meet three strict criteria:

1. You must have spent the money yourself and weren’t reimbursed by your employer.
2. The expense must directly relate to earning your income. There needs to be a clear connection between the cost and your job.
3. You must have a record to prove it. This is the substantiation rule. For most claims, this means a tax invoice or receipt.

Understanding the difference between a deduction and a tax offset is also crucial. A deduction reduces your taxable income, giving you a benefit based on your marginal tax rate. A tax offset is more valuable, reducing your final tax bill dollar-for-dollar.

Claim 1: Work-From-Home Expenses in 2026

With so many Australians now working from home, you’d think claiming your running costs would be straightforward. The reality is, it’s one of the most common areas where people get their tax wrong.

If you’re incurring extra expenses to do your job from home, you’re almost certainly entitled to a deduction. The trick is knowing which method to use and what records the ATO expects you to keep.

• What it is: A claim for the running costs incurred while working from your home.
• Who can claim: Employees who are required to work from home and incur additional running expenses as a result.
• Example: A marketing manager who works from home three days a week can claim a portion of their internet, phone, and electricity bills.
• Evidence Required: A record of hours worked from home (like a timesheet or diary) and receipts for expenses if using the actual cost method.
• Compliance Tip: You cannot claim for private use. Apportionment is critical. Always check current ATO guidance for the latest fixed rates and rules.

The ATO gives you two options: the revised fixed-rate method or the actual cost method. For a full breakdown, check our guide on how to claim work from home expenses.

Claim 2: Self-Education and Professional Growth Costs

Investing in your skills is always a smart move, but are you making sure the ATO helps foot the bill? The golden rule is simple: the study must have a direct, solid link to your current job. We’re talking about courses that maintain or sharpen the specific skills you need for your role, with a good chance of boosting your income from that same job.

• What it is: A deduction for the cost of courses, textbooks, and other expenses related to improving skills for your current role.
• Who can claim: Individuals undertaking study that is directly connected to their current employment.
• Example: A registered nurse completing a specialised course in aged care can claim the course fees and related material costs.
• Evidence Required: Enrolment confirmation, course syllabus, and receipts for all associated costs like tuition, textbooks, and stationery. Tech used to how to record lectures may also be claimable.
• Compliance Tip: You cannot claim a deduction for a course designed to get you a new job in a different field. The link to your current income-earning activity must be clear.

Deductible Example	Not Deductible Example
An HR Manager doing a Master of Human Resources.	An HR Manager doing a graphic design course for fun.
An electrician taking a course on new wiring standards.	An electrician studying to become a financial planner.
A nurse completing a specialised clinical skills workshop.	A nurse taking a general business management degree.

Claim 3: Car and Work-Related Travel Expenses

Car expense claims are a huge red flag for the ATO, but they’re also one of the most significant deductions available. Getting it right is non-negotiable, as even small mistakes can trigger an audit. Let’s clear one thing up first: your daily commute between home and your main workplace is almost never deductible.

• What it is: A claim for the costs of using your personal car for work-related travel.
• Who can claim: Employees who travel between workplaces, visit clients, or transport bulky tools required for their job.
• Example: A project manager driving from her main office to a client’s site for a meeting can claim the kilometres travelled.
• Evidence Required: A valid 12-week logbook or a diary to substantiate kilometres claimed, plus receipts for all running costs if using the logbook method.
• Compliance Tip: The cents per kilometre method is capped at 5,000 business kilometres. The logbook method requires meticulous records but often yields a higher claim. Because travel claims are heavily scrutinised, check out our guide on ATO audits for travel expenses. Always check current ATO guidance for the latest rates.

Claim 4: Home Office Equipment

This is different from WFH running expenses. This covers the physical assets and furniture you use in your dedicated home office space.

• What it is: A deduction for the cost of furniture and equipment used for work in a home office.
• Who can claim: Employees and self-employed individuals who have a dedicated home office.
• Example: A freelance writer purchasing an ergonomic chair and a new desk for their home office.
• Evidence Required: Receipts for the purchase. A logbook or diary to establish the work-use percentage is crucial.
• Compliance Tip: For items costing over $300, you must claim the decline in value (depreciation) over several years. You cannot claim an immediate deduction. You must also apportion the cost between work and private use.

Claim 5: Union and Professional Association Fees

This one’s a classic, but you’d be surprised how many people forget it. If you’re paying fees to a union or a professional body directly tied to your job, those costs are 100% tax-deductible.

• What it is: The annual fees paid to a registered trade union or professional association.
• Who can claim: Members of unions or professional bodies relevant to their occupation.
• Example: An engineer paying their annual membership to Engineers Australia.
• Evidence Required: Your annual statement or invoice from the organisation.
• Compliance Tip: You cannot claim a subscription to a social club or association that is not directly related to your profession.

Claim 6: Income Protection Insurance

Are you paying for income protection insurance? If so, the premiums for a policy that covers your income if you can’t work are generally deductible.

• What it is: Premiums paid on an insurance policy that protects you against loss of income.
• Who can claim: Anyone who pays for their own income protection insurance.
• Example: A self-employed builder paying monthly premiums on a policy that would replace their income if they were injured and unable to work.
• Evidence Required: Your insurance policy statement clearly showing the premium amount for income protection cover.
• Compliance Tip: You can only claim the portion of your premium that covers loss of income. Policies often bundle in life insurance, trauma, or critical care cover, these are not deductible. Check current ATO guidance (ATO guidance) for specifics.

Claim 7: Mobile Phone & Internet Expenses

Just like your home office, if you use your personal phone or home internet for work, you can claim a portion of those bills. The key is calculating a reasonable work-use percentage.

• What it is: A claim for the work-related portion of your personal phone and internet bills.
• Who can claim: Employees required to use their personal devices for work calls, emails, or other tasks.
• Example: A sales representative who uses their personal mobile to call clients can claim the work-related percentage of their monthly bill.
• Evidence Required: Phone and internet bills, plus a log or diary kept for a representative four-week period to determine the work-use percentage.
• Compliance Tip: Don’t guess! The ATO can request to see your calculation method. A 100% claim on a personal phone is a major red flag.

Claim 8: Tools & Equipment for Tradies

For so many jobs, especially in the trades, having the right tools isn’t a luxury, it’s a necessity. The good news is, you can claim these costs.

• What it is: The cost of tools and equipment required to perform your job.
• Who can claim: Tradies, chefs, mechanics, and other professionals who buy their own tools.
• Example: A carpenter buying a new power drill or a mechanic purchasing a socket set.
• Evidence Required: Receipts for all purchases.
• Compliance Tip: The claim method depends on the price. For items costing $300 or less, you can claim an immediate deduction. For items over $300, you must claim depreciation over the asset’s effective life.

Claim 9: Investment Property Expenses

Property investors are often great at claiming the big expenses like interest and agent fees, but many miss out on the smaller, equally valid deductions.

• What it is: Expenses incurred in the course of earning rental income from an investment property.
• Who can claim: Owners of investment properties that are genuinely available for rent.
• Example: Claiming the cost of a plumber to fix a leaky tap or the annual pest control service.
• Evidence Required: Invoices and receipts for all expenses, bank statements showing interest paid, and land tax assessments.
• Compliance Tip: Distinguish between repairs (immediately deductible) and capital improvements (which are depreciated). A repair brings something back to its original state, while an improvement makes it better.

Claim 10: Cost of Managing Tax Affairs

This is the easiest deduction of them all. The fee you paid to a registered tax agent or accountant like us at Nanak Accountants & Associates to prepare and lodge last year’s tax return is deductible this year.

• What it is: The fee paid to a registered tax agent for preparing and lodging your tax return.
• Who can claim: Anyone who paid a tax agent in the previous financial year.
• Example: You paid your accountant $250 in July 2025 to lodge your 2025 tax return. You can claim that $250 fee in your 2026 tax return.
• Evidence Required: The invoice from your tax agent.
• Compliance Tip: This deduction is claimed in the financial year you pay the fee, not the year the return relates to.

Worked Example: How Deductions Impact Your Refund

Let’s see how these deductions add up for a typical employee.

Meet Sarah, a marketing manager in Sydney earning $80,000 per year. Here are some deductions she identified after reading this guide:

• WFH Expenses: Worked from home 2 days/week. Using the revised fixed-rate method (assuming a rate of 67c/hour for this example), she claims $891.
• Self-Education: Completed a $1,500 online digital marketing course directly related to her role.
• Mobile Phone: Calculated a 40% work-use of her $60/month phone plan, claiming $288.
• Professional Fees: Paid $350 for her industry association membership.
• Tax Agent Fee: Paid $220 last year to lodge her return.

Total Deductions: $891 + $1,500 + $288 + $350 + $220 = $3,249

This reduces Sarah’s taxable income from $80,000 to $76,751. At her marginal tax rate (32.5% plus Medicare Levy in this bracket), this translates to an estimated tax saving of approximately $1,120. This is money that would have been lost without careful planning. Check current ATO guidance for the latest tax rates.

Common Mistakes and How to Fix Them

Getting the biggest tax refund is the goal, but a simple mistake can shrink your return or put you on the ATO’s audit radar.

• Mistake: Claiming 100% of a mixed-use item (like a phone or laptop).
  • Fix: Apportion the expense. Keep a log for a four-week period to determine a reasonable work-use percentage and only claim that portion.
• Mistake: Claiming home-to-work travel.
  • Fix: Don’t do it. This is almost never deductible. Only claim travel between job sites or to client meetings.
• Mistake: Not keeping receipts because the transaction is on a bank statement.
  • Fix: Get a tax invoice. A bank statement isn’t enough proof. Use a digital app to photograph and store receipts immediately. Knowing what receipts to keep for taxes is crucial.
• Mistake: Overclaiming WFH expenses by “guesstimating”.
  • Fix: Use one of the two official ATO methods. Either use the fixed rate and keep a record of your hours, or use the actual cost method and keep every single bill and a detailed work-use calculation.

Your Pre-Lodgement Tax Deduction Checklist

Before you hit ‘lodge’, run through this quick checklist:

1. Review the 3 Golden Rules: For every claim, can I prove I spent the money, it was for my job, and I have a record?
2. Check Apportionment: Have I correctly separated work and private use for my phone, internet, and car expenses?
3. Confirm WFH Method: Have I chosen the right WFH claim method and have the required records (hours diary or all bills)?
4. Verify Car Logbook: Is my car logbook (if used) less than 5 years old and does it reflect my current travel patterns?
5. Separate Insurance Premiums: If claiming income protection, have I only claimed the income protection component and not life or trauma cover?
6. Include Last Year’s Accountant Fee: Did I remember to claim the fee I paid my tax agent last year?
7. Organise Records: Are all my receipts and invoices stored safely and accessible in case the ATO asks for them? Stick to the official ATO record-keeping rules.

Frequently Asked Questions

What tax deductions can I claim in Australia?

In Australia, you can claim a deduction for most expenses you incur to earn your income, as long as you have proof. This includes work-related expenses, self-education, investment property costs, and more.

What can I claim on tax without receipts in 2026?

You can make a total claim of up to $300 for work-related expenses without receipts. However, you must still be able to show how you calculated the claim if the ATO asks. All other claims require valid proof of purchase.

Can I claim working from home expenses?

Yes. If you work from home, you can claim a deduction for the additional running costs you incur using either the revised fixed-rate method or the actual cost method. Always check current ATO guidance for the latest rules.

Are tax agent fees deductible?

Absolutely. The fee you paid to a registered tax agent to prepare and lodge last year’s tax return is fully deductible in this year’s return.

Can I claim my phone bill on tax?

You can claim the work-related portion of your phone bill. You must calculate a reasonable work-use percentage, typically by keeping a log for a four-week period, and only claim that portion of your bill.

How do I claim deductions correctly with the ATO?

1. Identify all potential work-related expenses throughout the year.
2. Keep detailed records and receipts for every expense.
3. Calculate the work-related portion for any mixed-use expenses (e.g., phone, car).
4. Report the deductions accurately in the appropriate section of your tax return.
5. Lodge your return, keeping all records for at least five years.

What’s the difference between occupancy and running expenses for a home office?

Running expenses (like electricity, phone, internet) are claimable by employees who work from home. Occupancy expenses (like rent, mortgage interest, rates) are generally only claimable if you are running a business from home and your home is your principal place of business.

How long do I need to keep tax records?

The ATO requires you to keep records, such as receipts and logbooks, for at least five years from the date you lodge your tax return.

Maximise Your Refund, Minimise Your Risk

Navigating the Australian tax system can be complex, but being informed is the best way to legally maximise your refund and stay compliant. By paying attention to these commonly missed deductions and maintaining good records, you can ensure you’re not leaving money on the table.

Don’t let tax time be a source of stress. Get expert, accountant-grade advice to ensure you claim everything you’re entitled to.

Ready to get your 2026 tax return right? Book a consult with Nanak Accountants & Associates- 1300 NANAK TAX (626 258).