Payback – for some

Tax time is better for some than others, writes Anthony Keane

TRADIES beat teachers, nurses and farmers, but nobody beats real estate agents and lawyers when it comes to the biggest work-related tax deductions.

A new analysis of Australian Taxation Office data by Etax.com.au examined several occupations and found real estate agents made an average annual work-related tax deduction of $8634 – 10 times that of shop assistants ($814).

Lawyers claimed an average $7156, followed by truck drivers at $5059, tradespeople at $4871 and farmers at $4428. The average deduction for all workers is $3413.

Etax.com.au senior tax agent Simone Gielis said many of the biggest claims came from occupations where workrelated travel was common.

“Real estate agents have the largest average deductions because the nature of their work requires a lot of travel expenses, car expenses and incidental out of pocket costs. They also have certifications and licences which need renewing annually,” she said.

Lawyers had a similar collection of deductions, Ms Gielis said, while tradespeople also had tools and technical equipment, and could claim transporting bulky goods to and from work.

Etax.com.au’s analysis found that teachers claimed an average $3164 while nurses claimed $2622.

Ms Gielis said workers wanting bigger deductions should embrace technology such as apps that helped them track their spending, use a tax agent (as 74 per cent of taxpayers already did) and keep every receipt.

“If you throw out that $1000 receipt and it turns out you could have used it for a tax deduction, you’ve just cost yourself hundreds of dollars,” she said.

The Australian Securities and Investments Commission’s moneysmart.gov.au site says people should remember the ATO’s three rules for claiming work-related expenses:

have spent the money yourself and not been reimbursed.

be directly related to earning your income.

have a record to prove you paid for it.

The ATO has produced almost 40 different occupation specific guides.

ASIC’s senior executive leader for financial capability, Laura Higgins, said “record keeping is really important” and people should use tools and technology to track spending throughout the year, not just at tax time.

“I always give clients peace of mind. I ask them, ‘if the share market stalls, will you stop buying milk’?” he said. “If you own Woolworths shares, you own part of 1200 supermarkets in Australia and they won’t stop trading (in a market slump).”

New investors can struggle to deal with losing money early.

“Commit the capital for a minimum of five years,” Mr Zbik said. “The market might be flat for five years and then the growth happens in the next four, it’s how the cycle works.”

Mr Zbik outlined three ways to invest your first $100,000 into the iShares S&P/ASX 200 ETF (ASX Code: IOZ), as an example only.

Had we done so in July 2015, it would be worth $100,623 after two years, plus we would have received $9815 in dividends; a total return of 4.91 per cent per annum.

However, the initial $100,000 would have been worth $85,587 in February 2016 – a 15 per cent decline after only eight months.

This shows investing is not a short-term project.

and then $20,000 more every six months. This would have reduced early losses and provided an end value of $104,261, but with fewer dividends of $5091 and total return of $9417 at 4.71 per cent per annum.

for 24 months, irrespective of where the ETF unit price or share market is at. Our end value would have been $106,333, with total dividends of $5120, equalling a $12,108 total return for two years at 6.09 per cent per annum.