Things you need to know
Did you have any other expenses that you have not been able to claim as deductions at questions D1 to D14 or elsewhere in your tax return?
No |
Go to Total supplement deductions 2023, or return to main menu Individual tax return instructions 2023. |
Yes |
Read on. |
Don't include at this question
Do not show at this question:
- expenses relating to your work as an employee
- expenses relating to income from carrying on a business as a sole trader (including personal services income or as a share trader)
- expenses relating to investment planning and advice involving shares, unit trusts and interest-bearing deposits
- losses from the disposal of shares or real property that are capital in nature.
Other questions deal with these matters.
Expenses you may be entitled to claim
You may claim at this question:
- election expenses for local, territory, state or federal candidates
- income protection, sickness and accident insurance premiums
- foreign exchange losses
- expenses related to income you earned from the sharing economy or other marketplace which is not derived from carrying on a business or as an employee of the digital platform
- debt deductions incurred in earning assessable income that are not disallowed under the thin capitalisation rules and have not been claimed elsewhere
- debt deductions incurred in earning certain foreign non-assessable non-exempt income that are not disallowed under the thin capitalisation rules
- amounts deductible for certain business-related capital expenditure under section 40-880 of the Income Tax Assessment Act 1997 (ITAA 1997)
- over 5 income years relating to a business you carried on through a company or a trust, or
- immediately as start-up expenses relating to the structure or the operation of the business that is proposed to be carried on
- a deduction for the net personal services income loss of a personal services entity that related to your personal services income
- certain deductible capital expenditure not claimed in full before ceasing a primary production business where a deduction can be claimed in a subsequent year or years
- non-capital losses incurred on the disposal or redemption of a traditional security which are deductible under section 70B of the Income Tax Assessment Act 1936 (ITAA 1936); for more information, see the section on Sale or disposal of company bonds and convertible notes in You and your shares 2023
- small business pool deductions for depreciating assets of your small business pool that you cannot claim at question P8 Business income and expenses on the Business and professional items schedule for individuals 2023 because you did not carry on a business in 2022–23; for more information, see Small business entity concessions
- self-education expenses you incurred in doing a course to satisfy the study requirements of a taxable scholarship.
You cannot claim deductions for expenses incurred in actively seeking paid work if you receive Youth Allowance or JobSeeker payment as a job seeker.
Election expenses
Election expenses include a candidate's costs of contesting an election at a local, territory, state or federal level of government. A deduction for local government election expenses cannot exceed $1,000 for each election contested, even if the expenditure is incurred in more than one income year. Entertainment expenses qualify as deductible election expenses only in very restricted circumstances.
For more information about deductions for election expenses, see TR 1999/10 Income tax and fringe benefits tax: Members of Parliament – allowances, reimbursements, donations and gifts, benefits, deductions and recoupments.
You must show as income at question 24 in your tax return a reimbursement in 2022–23 of any election expenses that you have claimed as a deduction in 2022–23 or a previous year.
Income protection, sickness and accident insurance premiums
You can claim the cost of any premiums you paid for insurance against the loss of your income. You must include any payment you received under the policy for loss of your income at questions 1, 2 or 24 in your tax return.
You cannot claim a deduction for a premium or any part of a premium which you paid under a policy to compensate you for such things as physical injury. Life insurance, trauma insurance and critical care insurance are some types of policies for which premiums are not deductible.
You cannot claim a deduction for a premium where the policy is taken out through your superannuation fund and the premiums are deducted from your superannuation contributions.
Foreign exchange losses
Unless you carried on a business and have included all your foreign exchange losses (forex losses) in calculating your business net income or loss at question 15, your deductible forex losses must be shown at this question (except any foreign source forex losses that you have included at question 20). Show any assessable foreign exchange gains (forex gains) at question 24 in your tax return.
Losses attributable to a fluctuation in a currency exchange rate or to an agreed exchange rate differing from an actual exchange rate are brought to account when they are realised. This is when you:
- dispose of either foreign currency, or a right to such currency
- cease to have a right to receive or pay foreign currency, or
- cease to have an obligation to pay or receive foreign currency.
Some forex losses are not deductible, for example, forex losses of a private or domestic nature, or those relating to exempt income. In some cases, forex losses on the acquisition of capital or depreciating assets, or on the disposal of capital assets, are also not deductible. In these cases, the losses are integrated into or matched with the taxation treatment of the underlying asset.
In some circumstances, you may make an election that affects the realisation or treatment of a forex loss. You can find more information about the forex measures and how to calculate your forex losses at Foreign exchange gains and losses.
Expenses related to income earned through the sharing economy or other marketplaces
The sharing economy is economic activity through a digital platform (such as a website or an app) where people share assets or services for a fee. Amounts you receive are assessable income, even if you are not carrying on a business.
Include at this question expenses you incurred that relate to income you received from renting or hiring (sharing) out your assets through a digital platform.
If you own or lease an asset jointly, then you claim your deduction in proportion to your share of ownership.
Car expenses have special deduction rules, which do not apply to other vehicles such as trucks, motorbikes, bicycles, or self-drive recreational vehicles (RVs).
Caravan or RV expenses have special rules for calculating apportionment for income-producing and private use.
Also include at this question expenses you incurred that relate to income you received from providing services or completing tasks through a digital platform, except income earned as an employee of a digital platform.
Do not show expenses at this question related to:
- Income earned through sharing economy or market place activities where you are carrying on a business; show this amount at question P8 (Business and professional items schedule).
- Rental income, such as renting all or part of your home; show this amount at question 21 in your supplementary tax return.
- Employee salary or wages; show this amount at the relevant deduction question D1–D5 in your tax return.
You must apportion your expenses for private use. You can only claim deductions for your expenses to the extent that they relate to your income-producing activities. You may be able to claim fees or commission charged by a digital platform as a 100% deduction.
Peer-to-peer car sharing – car expenses
If you share your car through a digital platform, you can deduct car expenses that directly relate to the income received for sharing out your car. These rules do not apply to other vehicles such as trucks, motorbikes, bicycles or self-drive recreational vehicles.
Car expenses include decline in value, interest, leasing payments, insurance and registration. They can also include service, repair, cleaning and fuel expenses if you incur those expenses under your car sharing agreement. Different agreements require either the car borrower or the car owner to bear the costs of refuelling the car. You are entitled to claim expenses only to the extent that you have incurred them.
In most cases, you will also use your car for private use. You can only claim deductions for your car expenses to the extent that they relate to your income-producing activities. This means you need to apportion any car expenses between private use and income-producing use.
If you own the car as an individual (or as partner in a partnership that has an individual partner), there are 2 methods of claiming car expenses:
- cents per kilometre
- logbook method.
Peer-to-peer caravan sharing – apportioning expenses
If you share your caravan or RV and there is also private use during the year, you must apportion your expenses to account for the private use. You can only claim deductions for your expenses to the extent that they relate to your income-producing activities.
Private use includes any use by you, your family, relatives or friends which is free of charge or for a small fee to cover running costs. If your caravan or RV is rented or hired out to family, relatives or friends at below market rates, your deductions are limited up to the amount of the income you receive.
If you purchased or use your caravan or RV mainly for:
- private use – you can only claim deductions related to the periods when the caravan or RV is actually rented, any other time is considered private use, even if it is available for rent on the platform
- income-producing use – you're entitled to claim deductions for periods when the caravan or RV is rented or genuinely available for rent.
There are multiple factors you need to consider to determine whether your caravan or RV was genuinely available for rent.
Debt deductions
You may claim 'debt deductions' incurred in earning assessable income (for example, foreign source income that has been included at question 20 in your tax return) at this question, if you have not claimed them elsewhere in your tax return.
A 'debt deduction' is, broadly, an expense incurred in obtaining or maintaining a loan or other form of debt finance. Examples include interest, establishment fees, legal costs for preparing loan documents and fees charged by lending institutions for drawing on a loan facility.
If you were an Australian resident, you can claim debt deductions incurred in earning certain types of foreign non-assessable non-exempt income that were payments out of attributed controlled foreign company income or attributed foreign investment fund income.
You are not allowed to claim debt deductions disallowed under the thin capitalisation rules. Thin capitalisation rules may apply if:
- you were an Australian resident and you (or any associate entities) had certain overseas interests and your debt deductions combined with those of your associate entities were more than $2 million for 2022–23, or
- you were a foreign resident with operations or investments in Australia and your debt deductions against Australian assessable income combined with those of your associate entities were more than $2 million for 2022–23.
Special rules apply to deductions for expenses that you incur in borrowing money that you use for producing assessable income. Examples of such expenses include establishment fees and legal costs for preparing loan documents. Interest expenses are not subject to these rules and are deductible in the year in which you incur them.
If the total of these expenses you incurred in 2022–23 is more than $100 you have to deduct the expenses over the shorter of the following periods:
- the life of the loan, or
- 5 years from the date you first borrowed the money.
If the total of these expenses you incurred in 2022–23 is $100 or less, you can deduct them immediately.
Section 40-880 deductions
This section allows you to claim a deduction for certain business-related capital expenditure over 5 income years or immediately in case of some start-up expenses.
Expenditure deductible over 5 income years
Claim a section 40-880 deduction at this question if:
- you incurred the relevant capital expense, and
- the expenditure relates to a business that was proposed at the time the expense was incurred
- the business commenced by 30 June 2023, and
- you are carrying on the business through a company or trust, or
- you incurred the relevant capital expense and the expenditure relates to a business which ceased in a previous income year and you carried on the business through a company or trust.
If you incurred relevant section 40-880 expenses in relation to a business which ceased in a previous income year and you carried on the business as a sole trader or through a partnership, claim the amount at question P8 Business income and expenses on the Business and professional items schedule for individuals 2023. If this applies to you, then you should lodge your tax return using myTax or a registered tax agent.
If you are unable to use myTax or a registered tax agent, contact us and we will mail you a paper tax return and Business and professional items schedule for individuals 2023.
Certain start-up expenses
From 1 July 2015, section 40-880 of the ITAA 1997 allows a taxpayer who is not in business, or who is a small business entity, to immediately deduct certain start-up expenses relating to the structure or operation of a business that is proposed to be carried on.
This was extended to medium businesses for expenses incurred from 1 July 2020.
Expenditure is fully deductible in the income year in which it is incurred if it:
- is incurred by you and you are a small or medium business entity, or you were not in business during the income year, and
- relates to a business that is proposed to be carried on, and
- is either
- incurred for advice or services relating to the structure or operation of the business, or
- paid to an Australian government agency in relation to setting up the business or establishing its operating structure.
If you incurred relevant section 40-880 expenses that do not qualify for immediate deduction and you had not commenced the business by 30 June 2023, your deduction for this amount will be deferred until the year in which the business activity commences. The deferred amount may be deducted in the income year in which the activity commences.
For more information about section 40-880 deductions, see Guide to depreciating assets 2023.
Net personal services income loss of a personal services entity that related to your PSI
There are special rules for the income tax treatment of certain personal services income(PSI). PSI is income that is mainly a reward for your personal efforts or skills and is generally paid to you or to a personal services entity (being a company, partnership or trust).
Where the payment was made to a personal services entity and that entity incurred a PSI loss relating to your personal services income, you can claim a deduction for that loss.
For more information about PSI deductions, see Claiming deductions when receiving PSI.
If you need help with these rules, contact us.
Self-education expenses related to satisfying the study requirements of a taxable scholarship
You may claim at this question expenses you incurred in meeting the study requirements of a taxable scholarship. However do not claim these expenses here if you were an employee of the provider; claim them at D4 Work-related self-education expenses 2023.
Examples of expenses you can claim are textbooks, stationery, student union fees, student services and amenities fees, the decline in value of your computer and certain course fees.
You cannot claim a deduction for travel from your home to your normal place of education and back.
Use our Self-education expenses calculator to help you work out your deduction
Completing your supplementary tax return
To complete this question, follow the steps below.
Step 1: Election expenses
Add up all your deductible election expenses. Write the total amount at question D15 – label E on page 15 of your tax return. Do not show cents. If you have no other expenses, go to Check before moving to the next question otherwise, read on.
Step 2: Other expenses
Print the type of expense you are claiming in the Description of claim box at question D15. If you are claiming for more than one type of expense, print 'multiple expenses' in the Description of claim box.
Step 3
Add up all the other expenses that you are claiming at this question (excluding election expenses).
Step 4
Write the amount from step 3 at question D15 – label J. Do not show cents.
Check before moving to the next question
Check you have:
- written in your tax return the total amount of your deductible election expenses, if any
- printed in your tax return the type of other expenses you are claiming
- written in your tax return the total amount of all other expenses you are claiming.
Where to go next
- Go to Total supplement deductions 2023.
- Return to main menu Individual tax return instructions 2023.
- Go back to question D14 Forestry managed investment scheme deduction 2023.