7 health investments that are tax deductible
When someone says “investment”, we tend to think of money and wealth creation: property, shares, superannuation, savings accounts and so on.
However, an investment is the contribution of something you value towards the anticipation of growing that value. That contribution could be money or it could be in the form of time, skills, knowledge, or labour. Similarly, the anticipated growth in value could be in monetary terms or towards growth in business, education, research, or even health – both your own and others’.
Just like money matters and tax affairs require a wholistic view, so too does health. Which is why when it comes to getting the most out of health investments, it’s crucial to consider physical, mental and financial health. Many, such as those listed below, happen to be tax deductible too:
- Safety equipment and education
Workplace safety is perhaps the most crucial of all health investments. What form that takes can differ enormously between professions. Yet if it is important for doing your job safely, then generally it will be tax deductible.
This may be protective clothing for tradespeople, medical workers, and industrial machinists, or advanced driving/road safety training courses for taxi drivers and couriers.
Sun protection for jobs that take place largely or exclusively outdoors is also generally deductible – but use those sunglasses or sunscreen at home as well, and you’ll only be able to claim the work-related portion of the cost.
- Insurances
Certain insurance premiums are typically tax deductible.
Professional indemnity insurance is a legitimate (and often essential) business expense in many jobs, such as for doctors and journalists. Income protection insurance against severe illness or injury may also be deductible.
Plus, having private health insurance also delivers a tax benefit when lodging your tax return.
- Professional coaching
Professional coaching can be useful for mental health and clarity, both over existing work situations and career progression or transition planning.
Provided this coaching is strictly professional and relates to your ability to earn an income, it may be tax deductible.
- Accounting and financial advice
Good financial health goes hand in hand with good advice about money matters.
Most Aussies know that the cost of managing their tax affairs is deductible. Less well known, though, is that financial advice expenses are also generally deductible.
Busy accountants can forget to ask if you incurred these costs when going through your expenses at tax time, so be sure to flag it with them.
- Industry-specific deductions
In some instances, health-related expenses may be tax deductible because they are required within a particular job.
For instance, models, athletes and fitness instructors may be able to claim gym memberships and nutritionist visits; dieticians and chefs may be able to claim healthy eating books and subscriptions.
Check the ATO’s Occupation and industry-specific guides to see relevant deductions in your line of work.
- Medical checks
If you require compulsory medical assessments and check-ups as part of your job, these may be tax deductible. Examples include health screenings for pilots, miners, and emergency workers.
COVID-19 tests to determine whether you can attend your workplace may also be deductible.
Vaccinations, however, are deemed by the ATO to be private expenses.
- Donations
Many health organisations are registered charities and not-for-profits, making donations to them deductible. Often, people donate to health charities because of personal experience, either as a patient/survivor themselves or having known someone who was.
So not only are you investing in critical research and future patient support as a means of giving back, but you can also claim a tax deduction as a reward for donations over $2.
Proof of purchase is key
For any expense to be tax deductible, it must be necessary for work purposes and have come out of your own pocket, not been paid for or reimbursed by your employer.
Don’t forget to claim depreciation of work-related equipment over subsequent years. These are extra dollars in your pocket to offset the cost of their eventual replacement.
And be sure to keep copies of receipts for your purchases to prove your expenses – both now and in the future.
Helen Baker is a licensed Australian financial adviser and author of On Your Own Two Feet: The Essential Guide to Financial Independence for all Women. Helen is among the 1% of financial planners who hold a master’s degree in the field. Proceeds from book sales are donated to charities supporting disadvantaged women and children. Find out more at www.onyourowntwofeet.com.au
Disclaimer: The information in this article is of a general nature only and does not constitute personal financial or product advice. Any opinions or views expressed are those of the authors and do not represent those of people, institutions or organisations the owner may be associated with in a professional or personal capacity unless explicitly stated. Helen Baker is an authorised representative of BPW Partners Pty Ltd AFSL 548754.
Image credits: Shutterstock