Tax saving strategies prior to 1 July 2021
A strategy often used to reduce taxable income (and, in turn, tax payable) in an income year is to bring
forward any expected or planned deductible expenditure from a later income year. However, in light of the continued impact of the COVID-19 pandemic, any tax planning for individuals with potentially reduced income for the 2021 tax season may require consideration of deferring any deductible expenditure (if possible).
Common claims made by individuals
The following outlines common types of deductible expenses claimed by individual taxpayers, such as
employees and rental property owners, and some strategies for increasing their deductions for the
2021 income year.
1. Depreciating assets costing $300 or less
Salary and wage earners and rental property owners will generally be entitled to an immediate deduction for certain income-producing assets costing $300 or less that are purchased before 1 July 2021.
Some purchases you may consider include:
tools of trade;
calculators or electronic organisers;
books and trade journals;
briefcases/luggage or suitcases.
2. Clothing expenses
Individuals may pay for work-related clothing expenses before 1 July 2021, such as:
~ compulsory (or non-compulsory and registered) uniforms, and occupation specific and protective clothing; and
~ other associated expenses such as drycleaning, laundry and repair expenses.
3. Self-education expenses
Employees may prepay self-education items before 1 July 2021, such as:
~ course fees (but not HELP repayments), student union fees, and tutorial fees; and
~interest on borrowings used to pay for any deductible self-education expenses. Also they may bring forward purchases of stationery and text books (i.e., those that are not required to be depreciated).
4. Other work-related expenses
Employees may also prepay any of the following expenses before 1 July 2021:
~ Union fees.
~Subscriptions to trade, professional or business associations.
~ Seminars and conferences.
~ Income protection insurance (excluding death and total/permanent disability).
~ Magazine and professional journal subscriptions.
Note: If prepaying any of the above expenses before 1 July 2021, ensure that any services being paid
for will be provided within a 12-month period that ends before 1 July 2022. Otherwise, the deductions
will generally need to be claimed proportionately over the period of the prepayment
You will need to provide us with information to assist in preparing your income tax return. Please check
the following and provide any relevant statements, accounts, receipts, etc., to help us prepare your
Expenses/Deductions (in addition to those mentioned above):
~ cooling and heating;
~ depreciation of office furniture;
~ lighting; and
~ telephone and internet.
Interest and dividend deductions, such as:
account keeping fees;
ongoing management fees;
interest on borrowings to buy shares; and
advice relating to changing investments (but not setting them up).
Interest on loans to purchase equipment or income-earning investments.
~ Motor vehicle expenses (if work-related).
~ Overtime meal expenses.
~ Rental property expenses, including:
~ Sun protection items.
~ Tax agent fees.
~ Telephone expenses (if work-related).
~ Tools of trade.