As of 1 October 2015 Online Accounting and Taxation Solutions has changed name to Affinitas Accounting, you have now been redirected to the new page.

BBQ Talk 4

When I claim something as a tax deduction I will get ALL that money back in my tax?

ANSWER

This is something that always comes up a few times per year as we prepare tax returns. You may well be able to claim 100% of an expense as a tax deduction  but the actual money benefit to you is only related to your tax bracket. This is because the tax deduction reduces your taxable income, it does not come back to you as a 100% tax offset.

For example, if you are in the 30% tax bracket and you claim $300 for your union fees, then you would receive a $90 (30%) tax benefit. This $90 will either come back to you as extra refund or will reduce your tax bill (if you have one) by $90.

So when it comes to tax deductible expenses, always remember that they are still costing you real money and the tax deduction just reduces the overall cost.

Need friendly advice? Talk to our staff today about how we can help your business succeed.

Subscribe to Affinitas Accounting's newsletter for our latest updates, tips of the trade in your email inbox.

  • This field is for validation purposes and should be left unchanged.