Insuring your business

What insurances are tax deductible?

27 June 2018

The following information is general in nature and has not considered your individual circumstances and is subject to change from time to time. Consult the Australian Tax Office (ATO) or your registered tax advisor to understand if these tips are applicable to you.

Ever wondered if you’re getting the most out of your tax return? Depending on your individual or business’s circumstances, you could be entitled to claim a deduction for a number of insurance products. Read on to learn about five expenses you could claim for on this year’s tax return. And make sure to browse our list of tax-time tips.

Five insurance deductions that are  generally claimable at tax-return time

  • Is home insurance tax deductible?

You could claim a portion of your home insurance if you run a business out of your home. The Australian Taxation Office (ATO) says that you can claim occupancy expenses if your home is your principal workplace and you have a dedicated work area. Find out more from the ATO about home office expenses here.

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  • What about personal superannuation contributions?

Personal contributions to your superannuation from your after-tax income are tax deductible for most people under 75. In order to claim the deduction, the s290-170 form must be completed before you lodge a tax return, and you’ll need acknowledgement from the trustee of the fund. The ATO has the forms and nitty-gritty details here. You should check how this applies to your personal circumstances.

  • Is Car insurance tax deductible?

You may be able to claim your car insurance if you use your vehicle in performing your job or in running your business. If you use the log-book method, you can generally claim the work-related percentage of your car insurance as a deduction. The cents per kilometre method incorporates all costs, so there is no separate deduction for car insurance if you use this method. Consult the ATO website or your tax adviser for more detail on each of the methods.

  • Is Income protection tax deductible?

You can generally claim a deduction for income protection insurance products if it’s taken out as a separate policy from your superannuation. Your super fund should be claiming allowable deductions for income protection purchased through super.

Other tax tips

  • If you are a small-business owner (with an annual turnover under $10 million), then you can generally claim deductions up to $30,000 for assets purchased, like vehicles, tools, and office equipment. The assets must be used or installed for use in the income year that you’re claiming for.
  • Remember to claim for depreciation on work-related depreciating assets, if eligible to do so. That’s things like computers, equipment, vehicles, and furniture. Find out more about depreciating assets here.
  • Deductions must be directly related to earning your income. Deductions may need to be apportioned between personal and work use. For example, if you are making a claim for a phone that is used for both personal and work purposes, you must only claim for the work-related usage.
  • You need to retain records to support your deductions. Records includes receipts and invoices for equipment or asset purchases and sales; expense claims and repairs; payment summaries; sufficiently detailed bank statements; contracts; and tenant rental records. 
  • Make sure to lodge your tax return by October 31, unless you have engaged a tax agent. If you owe the tax office money you might face penalities and interest if you fail to lodge and pay by the due date.
  • If you wait until August or September to submit your claim, a lot of information should be already filled out on your tax return form online through myGov, saving you time and reducing the chance of mistakes.
  • Check out the ATO website for more information on tax deductions.

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The information is intended to be of a general nature only. We do not accept any legal responsibility for any loss incurred as a result of reliance upon it – please make your own enquiries.Consult the ATO or your registered tax advisor to understand if these tips are applicable to you or how they apply to your personal circumstances.

GIO Home and Contents, Landlord and Car insurance issued by AAI Limited ABN 48 005 297 807 trading as GIO. Consider the relevant Product Disclosure Statement before making a decision about any insurance.This advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it.