Australians are increasingly focused on reducing their taxable income by maximizing their deductions.
One of the most frequently asked questions is whether financial advice can be claimed as a tax deduction. The ATO recently updated their laws around the deductibility of advice, set out in TD 2024/7. The answer isn’t always straightforward, but with the right information, you can make the most of your eligible deductions.
This guide will help you understand when financial advice qualifies as a deduction, so you’re ready for tax season.
What Types of Financial Advice Are Tax Deductible?
The deductibility of financial advice depends on its purpose. Generally, the Australian Taxation Office (ATO) allows deductions on expenses that contribute to generating assessable income. Below are common types of financial advice and their deductibility status:
1. Investment-Related Advice
Financial advice directly related to managing investments or generating income—such as guidance on stocks, property investments, or creating an income-generating portfolio—may be deductible. For example:
- Advice on investing in dividend-paying shares can qualify for a deduction.
- Guidance on buying a rental property for income purposes may also be deductible.
2. General Financial Planning
General financial planning, like budgeting, retirement, or superannuation planning, typically doesn’t meet the ATO’s criteria. However, in some cases, expenses tied to managing your investment portfolio within superannuation can be deductible, so it’s worth consulting a tax professional.
3. Ongoing Investment Management Advice
For those actively managing income-generating assets, ongoing advice for maximizing investment returns may be deductible.
