The Australian Tax Office (ATO) is warning taxpayers about copying and pasting claims from last year’s tax return.
There are key changes this tax time that taxpayers need to look out for when claiming deductions.
Copying and pasting last year’s claims into this year’s tax return will raise a red flag with the ATO. Consider the records you have to support your claims before submitting your return.
To claim a deduction for a work-related expense, there are three golden rules:
- you spent money yourself and weren’t reimbursed
- it directly relates to earning your income and it isn’t private in nature
- you must have a record to prove it (usually a receipt)
To claim working from home expenses, you can use the actual cost, or the revised fixed rate method to calculate your deduction, as long as you meet the eligibility and record keeping requirements.
The revised fixed rate method has increased form $0.52/hour to $0.67/hour worked from home, and you no longer need to have a separate home office or dedicated work-space.
The revised fixed rate covers your costs for electricity, gas, stationery, computer consumables, internet and phone usage. You c an claim a separate deduction for those expenses not included in the rate such as decline in value of depreciated assets, including computers and office furniture.
To use the revised fixed rate method, you need a record of the total hours worked from home. From 1 March 2023, you are required to keep a full record of the total number of hours you have worked at home.
You will also need evidence of the expenses covered by the rate that you have incurred, for example a monthly or quarterly bill.
You can claim a deduction for the cost of trips you undertake in performing your work duties. You cannot claim your ordinary commute between home and work.
This year, if you are eligible to claim work-related car expenses and you use the cents per kilometre method, the rate has increased from $0.72/kilometre to $0.78/kilometre.
The cents per kilometre rate includes decline in value, registration, insurance, maintenance, repairs and fuel costs.
You can claim up to 5,000 work related kilometres, per car. You must have written evidence to show how you calculated the work-related kilometres.
From 1 July 2022, the requirement to exclude the first $250 of certain self-education expenses has been removed. This change applies from the 2022-2023 income year onwards.
For more information visit the ATO website