It’s tax time again and the financial boost from a tax return will be a welcome boost for taxpayers.
As of 1 July, locals can now file for their tax returns on the Australian Taxation Office (ATO) website to be processed in the coming weeks.
However, the ATO is warning taxpayers to think twice before ‘copying and pasting’ work-related claims from last year’s tax return.
ATO Assistant Commissioner Tim Loh said there are some key changes to look out for this tax time when claiming your deductions.
“When you’re getting ready to lodge, consider the records you have to support your claims this year – don’t just copy and paste your claims from last year, this will raise a red flag for us,” he said.
Around 8.6 million Australians claimed nearly $21.6 billion in work-related expenses in their 2022 tax returns.
Mr Loh said the ATO has a series of 40 occupation and industry-specific guides for people to have a look at.
“We want people to get their deductions right on the first go and claim what they are entitled to – nothing more, nothing less.
“Some occupations have expenses that are specific to their occupation. For example, flight attendants can claim rehydrating moisturisers and nurses can claim stethoscopes – our guides can help you get it right,” he said.
To claim a deduction for a work-related expense, the golden rules to remember are if you spent the money yourself and weren’t reimbursed, it directly relates to earning your income and it isn’t private in nature and you must have a record to prove it (usually a receipt).
‘If you’re not sure, reach out to a registered tax agent to help you get your tax return right the first time,’ Mr Loh said.
Those who are working from home can expect an increased fixed rate method, from 52 cents to 67 cents, regardless of their working situation.
Mr Loh said to claim working from home expenses, taxpayers can use the actual cost, or the revised fixed rate method to calculate their deduction, as long as they meet the eligibility and record keeping requirements.
“You no longer need to have a separate home office or dedicated work-space – if you are working from the couch, you can still use this method,” he said.
The revised fixed rate covers costs for electricity, gas, stationery, computer consumables, internet and phone usage.
Payers can claim a separate deduction for those expenses not included in the rate for example, decline in value of depreciating assets, such as computers and office furniture.
This year, for those eligible to claim work-related car expenses and use the cents per kilometre method, the rate has increased from 72 cents to 78 cents per kilometre.
The cents per kilometre rate includes decline in value, registration, insurance, maintenance, repairs and fuel costs.
Payers can claim up to 5,000 work related kilometres, per car. You must have written evidence to show how you worked out the work-related kilometres (for example, by keeping diary records of work-related trips).
From 1 July 2022, the requirement to exclude the first $250 of certain self-education expenses has been removed.
This change applies from the 2022–23 income year onwards.
The self-education expenses calculator can help calculate your deduction.
