Own ASX shares? Here are 3 investing tax deductions you may not be aware of

Aussie taxpayers, start getting your invoices together. It's tax time!

A man sits at his home desk calculating tax on a calculator.

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Key points

  • Investment subscriptions, such as your Motley Fool ones, may be tax-deductible
  • Travelling to an annual general meeting (AGM) of shares you own could be a deductible expense
  • Borrowing costs for investing in shares could be another deduction

It's almost the end of the 2023 financial year for Aussie taxpayers. Here are some useful tax deductions that ASX share investors should know about which could help improve their tax positions.

First up, we shouldn't spend money on something just for the sake of getting a tax deduction. But it's useful to know what investors can claim as deductions.

It's also recommended to get assistance from an experienced tax accountant or tax agent who can help with what is allowed on tax returns.

Now is a good time of year to gather your tax information while it's still fresh and make sure you have access to any invoices or other information. All going well, it's easier to find something now than in three months (or even later).

Of course, the following is general advice. You are best to speak to a tax professional about your personal circumstances.

What are deductions?

The Australian Taxation Office wants to know about the different types of taxable income we make, such as wages, interest, and dividends. Taxpayers are permitted to claim (allowable) deductions where expenses have been incurred to generate that taxable income.

With investing, we're talking about allowable deductions that relate to generating dividends and capital gains.

If investors claimed investment tax deductions last year, then that could be a good place to start constructing a list of potential deductions for FY23.

Let's look at three deductions that may be relevant.

(ASX share) investment subscriptions

One of the ATO-allowed deductions that could be claimed is the "cost of specialist investment journals and subscriptions".

This could be a Motley Fool subscription cost for example. For members who can't find their receipts, they can contact [email protected] to try to help with this.

There may also be other investment services that can be claimed if they have been purchased during the 2023 financial year.

Travel and other managing expenses

If investors have to travel to manage their ASX share investments, such as going to an annual general meeting (AGM) of a business that they hold shares in, that could be claimable because it involves managing your investments.

There may be other expenses that could be applicable such as the appropriate portion of the cost of internet access and the decline in value of an investor's computer. For example, if half of one's internet usage is for managing investments, then that could mean investors may be able to claim 50% of the expense.

Interest and borrowing expenses

The third area I'm going to talk about is if investors have borrowed money to invest in shares.

The ATO states that borrowing costs and interest could be claimable. However, you "can't claim a deduction for interest you incur on a personal tax debt". For example, you can't claim the interest on a loan you take to cover your personal tax debt.

Foolish takeaway

As I said above, it's definitely worth getting help from a tax agent to ensure the right deductions are claimed.

Improving our tax positions can certainly help grow our wealth as it could mean having more cash to invest in more ASX shares, which would be great!

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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