With the end of the financial year approaching, there are several tax changes that individuals and businesses should be aware of.
Working from home: The fixed rate method for claiming home office expenses is 67 cents per hour.
This includes all costs for working from home including phone and internet. You can claim depreciation on office furniture and computers.
You need to have maintained a record of actual hours worked from home from 1 March 2023
Self-education expenses: the first $250 non-deductible threshold has been removed – meaning you no longer have to deduct $250 from self-education expenses.
Low and Middle Income earners tax offset: This has been removed. This was the approx. $1500 tax offset that provided the bigger refunds for the last 2 years. In 2023 refunds will be reduced to around $200-$300 for average taxpayers. More taxpayers may have to pay on lodgment of their returns if they earned interest or other income during the year.
Small business skills and training boost: Claim a bonus deduction of additional 20% on top of the normal deductions for costs of providing eligible training courses to employees from 29 March 2022 until 30 June 2024 (note this change is not yet law – currently in parliament awaiting approval).
Small business technology investment boost: There is a bonus deduction of 20% on top of normal deductions for expenditure incurred and depreciating assets purchased for digitalizing business operations. This applies to expenditure from 29 March 2022 until 30 June 2023. (NOTE this change is not yet law – currently in parliament awaiting approval).
Business assets: The 100% write off of business assets ends 30 June 2023. To claim the purchase of a capital asset in 2023, the asset must be installed ready for use before 30 June 2023. If you want to deduct the costs of a business vehicle (up to the depreciation cap $64,741) – it must be in your possession and ready to drive on the road before 30 June. From 1 July 2023 the maximum amount that can be written off per asset for small businesses is $20,000.
Before 30 June
Superannuation: If you want to claim a deduction for superannuation or a co-contribution payment from the government for 2023 – contributions must be received into the super fund bank account by 30 June.
Allow at least 10 days for this to take effect. Contributions should be made before 20 June to ensure they have been received by the fund on time.
Vehicles: Record the odometer reading on your vehicle at 30 June if you are claiming vehicle costs.
Ensure vehicle logbooks are up-to-date – if claiming a percentage of vehicle use for work or business, a logbook must be maintained for 12 continuous weeks recording the date, purpose of the journey, destination and kilometers travelled. This logbook is current for five years unless there are substantial changes to the travel use of the vehicle.
Records: Gather up all receipts of expenses paid for the year – good records will ease the pain of an ATO review.