The 2022-23 financial year has ended, and it’s time for Australians to file their tax returns. This past income year brought significant changes that could impact your tax return. Whether you’re preparing it yourself or seeking professional advice, staying informed about these key changes is essential.
Previously, work-related self-education expenses required a $250 reduction before claiming a deduction. However, starting from 1 July 2022, this reduction is no longer necessary.
Working from-home deductions
Starting 1 July 2022, the shortcut method for claiming 80 cents per hour for working from home (WFH) has been discontinued.
Taxpayers now have the option to choose between the actual expenses method or the newly revised fixed rate of 67 cents if they meet the following criteria:
- Undertaking substantial employment tasks or continuing the operation of their business if it produces income. Tasks such as checking emails will not qualify.
- Incurring additional running expenses which are deductible under section 8-1 of the ITAA 1997 Act including energy expenses, internet expenses, phone expenses, and stationery and computer equipment.
- Keeping and retaining relevant records of the time spent WFH and the additional running expenses being incurred.
For the 2023-24 and future income years, taxpayers must keep a record for the entire income year of the number of hours worked from home. This record can be in the form of timesheets, rosters, a diary, or a similar document kept throughout the year.
Read our recent article for everything you need to know about the changes.
Cents per kilometre rate change
If you are required to use your car for work-related tasks the cents per kilometre rate was updated to 78 cents per kilometre.
Low and middle-income tax offset
The low and middle-income tax offset ended on 30 June 2022 and won’t be available for the 2022-23 income year. This may result in a lower refund compared to previous income years.
Veterans’ super (invalidity pension) tax offset
The veterans’ superannuation (invalidity pension) tax offset is a non-refundable tax offset. It was introduced after the Taxation v Douglas decision and aims to ensure veterans and their beneficiaries don’t pay more tax. It applies from the 2007-08 income year.
The age of eligibility to make a downsizer contribution to your superannuation has changed. If you have reached the new eligible age, you may be able contribute up to $300,000 from the proceeds of the sale (or part sale) of your home into your superannuation fund.
The eligible ages for making a downsizer contribution are:
- From 1 January 2023: 55 years old or older
- From 1 July 2022: 60 years old or older
- From 1 July 2018: 65 years old or older
Small business investment boosts
Announced in the 2022-23 Budget and still subject to law, the proposed investment boosts will allow businesses to invest in technology upgrades and staff training and receive an additional bonus deduction of 20% (totalling 120%) on the expenses incurred.
The two investment boosts are the:
- Small Business Technology Investment Boost (TIB)
- Small Business Skills and Training Boost (STB)
The TIB aims to help small businesses adopt digital technologies and support digital operations. The additional deduction of 20% is also available for eligible expenses incurred on depreciating assets to support these upgrades.
The STB aims to help small businesses train new or upskill existing staff. The STB will allow businesses to claim an additional 20% on the cost of external training courses provided to staff in Australia.
This article breaks down both investment boost in further detail.
If you would like assistance with lodging your 2022-23 tax return, get in touch today.