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11+tax-filing

Identify Allowable Deductions

Allowable deductions legally lower taxable income by removing qualifying expenses before tax is calculated — but only when documented. Claiming everything you are entitled to reduces the bill within the rules; not claiming it is money surrendered needlessly.

In this lesson

Identify Allowable Deductions is part of Preparing a Simple Tax Return. This preview shows how tax-filing connects to everyday family decisions such as earning, saving, spending choices, goals, approvals, or parent-guided money conversations inside Progress Penguin.

Think about this money choice

Kemi spent 80000 in local currency on equipment and training that were directly necessary for her work.

How it works

Allowable deductions reduce taxable income legally by subtracting qualifying expenses from total income before calculating the tax owed. For employed individuals, pension contributions and professional subscriptions may be deductible. For the self-employed, business expenses directly related to earning income are deductible. Identifying and claiming all allowable deductions reduces the tax bill without any grey area.

Apply it to a real decision

Real-life money moment: Kemi spent 80000 in local currency this year on two items directly related to her freelance work: a professional software subscription (45000 in local currency) and a certified professional development course (35000 in local currency). Both are wholly and exclusively incurred for her freelance income. She deducts them from her freelance income of 300000 in local currency: taxable freelance income = 220000 in local currency. At 15% tax rate, the deductions save her 12000 in local currency in tax.

Activity preview

Test the trade-off

Use the lesson to complete this short practice activity.

Try one real money action

Open Tasks and submit proof for one task, or open Requests and make a deposit request. Parent approval can happen later.

Quiz preview

Identifying allowable deductions means:

Knowing which work or business costs can legally be subtracted from taxable income
Claiming the maximum deduction possible regardless of whether you have receipts
Deducting any personal expense since all expenses reduce financial capacity to pay tax
Asking the tax authority to calculate your deductions since you cannot know them yourself

Which expense is most clearly an allowable deduction for a self-employed person?

Your monthly household grocery spending since it maintains your ability to work
Petrol for personal travel even if you occasionally take a work call during the journey
Personal gym membership since physical fitness improves work performance
Professional tools and equipment directly required to deliver your paid work