In a recent announcement, The Australian Tax Office issued a reminder of three key alterations to individuals’ tax returns. We’ve outlined these below:
- Removal of the self-education expenses threshold.
The $250 non-deductible threshold was removed for the 2022–23 year, with the changes also applying to the fringe benefits tax year starting 1 April 2023.
This change meant there were lower compliance costs for individuals looking to claim self-education expenses, however, it still is a requirement to have this reported in your Individual Tax Return. All records of deductible self-education expenses must be maintained.
- Revised fixed rate method for those working from home.
The updated method was 67 cents per work hour. Individuals can increase the rate per work hour that they claim when they work from home, change the record-keeping requirements and remove the requirement to have a home office set aside for work.
If you are not utilising the fixed-rate method, you must use the actual costs method, there is no longer a shortcut method available.
- The end of the low and middle-income tax offset (LMITO)
The low and middle-income tax offset ended on June 30, 2022, with the 2021/22 year being the final in which you could receive it. This key change may be a reason why you could receive a lower refund than you anticipate or potentially even a tax bill this year.
However, the low-income offset (LITO) was still available for taxpayers with a taxable income of $66,667 or less which could provide a maximum offset of $700 based on their taxable income.
Company Tax Returns
The ATO also reiterated the changes for the tax returns of companies, which included the introduction of temporary boosts for small businesses.
Small businesses with an aggregated turnover of less than $50 million could claim the temporary skills and training boost in the form of a bonus discount as an additional 20 per cent deduction for expenditure incurred for the provision of eligible external training courses to employees by registered training providers in Australia.
The temporary boost applied to eligible expenditures incurred from 7:30pm (AEDT) 29 March 2022 until 30 June 2024.
Small businesses could also claim the introduced temporary technology investment boost for small businesses as a form of a bonus deduction.
Eligible firms could claim an additional 20 per cent discount on top of the ordinary deduction for eligible expenditure incurred and depreciating assets acquired for their digital operations or digitising their operations.
The additional deduction would be up to $20,000 per income year and applies to eligible expenditures of up to $100,000 per income year incurred from 7:30pm (AEDT) 29 March 2022 until 30 June 2023.