Kiwipaul

Everyone who lives in Oz knows the banks charge an arm and a leg in bank charges generally.

But they also pay interest on these current accounts (I know it's a pittance) which you have to then declare to the tax office on your tax return to be slugged tax on this interest.

Now if they tax you on the interest surely the bank charges should be deductable as it's a cost to obtain the interest. I've been merrily claiming these deduction for a couple of years now and had no problems, just wondered if my reasoning is correct.

Don't tell me to move to HSBC because I like a bank I can get to if required and it only costs me $60 per year.

ABCDiamond

Certain Bank charges are claimable.

If your salary is paid into a bank account, then it is reasonable, and acceptable, to claim the costs associated with that bank account as a tax deduction.


I agree with offsetting bank charges against interest received also, and only paying tax on the NET earnings from that account However I am not sure how the ATO stands on that.

If you treat interest received as a business income, you should therefore be able to claim relevant business expenses against it.

Kiwipaul

My total yearly interest is less than $5 on my current account and my costs are $60 so I use the other $55 as a loss against the rest of my income.

I also use this account for paying all my personnel bills so it's a bit of a mixed bag.

ABCDiamond

If your wages go into that account, then it is an allowable deduction, whether you get any interest or not.

renth

Useful info. Thanks.

topcat

Great tip (though I'm with HSBC so haven't paid a penny
in charges yet).

Anymore unexpected tax deduction tips???

ABCDiamond

Keep your receipts for donations to registred charities. Anything over $2 per time is tax deductible.


If your children go to private school, and you pay a contribution to the school building fund, that is also tax deductible.