By Anne Bates of  Maianbar based Fincare Accounting

This issue of Finance Matters looks at the work related tax deductions as well as key tax changes for 2008.

It’s the end of the financial year so those who are anticipating a refund will be straight in to have their tax return prepared. There is always a lot of confusion around what items are tax deductible, here a few that may be of interest.

• Clothing – has to fall within the following categories: Protective, Occupation Specific, Compulsory Uniform or Non-Compulsory Uniform. The purchase & maintenance as such is deductible with up to $150 of laundry not requiring substantiation.
  
  
• Work related Self Education – must have a connection with income earning employment. Allowable deductions include Course Fees, textbooks, stationery, travel between home or work & your place of study, equipment (i.e.computer)
  
  
• Sun Protection Products. The tax office provides a list of industries it considers eligible, these include Building & Construction, Delivery & Courier, Farming, Fishing, Forestry, Landscaping & gardening, Outdoor Sports.
  

• Sickness & Accident Insurance Premiums – are a tax deduction whereas Life Insurance Policies are not. They are however if paid by your superannuation fund.

The tax office has various fact sheets on specific deductions for different industry types & occupations. These can be found on their website at www.ato.gov.au

There are to be a number of changes to come into effect from the 1st July that will put more money in our pockets on a weekly basis & make our refunds look healthier at the end of the year. These include:

• an increase in the tax thresholds
  
  
• increases in the thresholds for low income earners & seniors
  
  
• an increase in the Medicare Levy Surcharge to $100,000 for individuals & $150,000 for families.
  

Here are some of the changes & new initiatives that will benefit families

• The Child Care Tax Offset is to increase to 50% of eligible child care expenses with the maximum amount payable being $7,500 per child.

• An Education Tax Refund will be available to families receiving Family Tax Benefit (Part A). Eligible expenses include laptops, home computers, internet, printers, textbooks & stationery. Refunds will be 50% of eligible expenses per annum to a maximum of $375 for primary school & $750 for secondary school students.

• First Home Saver Accounts (To commence October 2008) available to individuals who qualify as a first home buyer. The government will contribute to amounts deposited with restrictions applying on contributions & withdrawals.