There are so many changes around taxation this year, says chartered accountant GAIL FREEMAN. Here’s her brief summary of the significant ones that could impact your tax return this year.

Refunds – since covid if your taxable income is less than $126,000 you would have received the low and middle income tax offset. This was an extra refund up to $1200 for the first two years and $1500 for 2022. This will not be paid from July 1, 2022, so your refund will probably be less in 2023. You could even be payable and not receive a refund. 

Home office expenses – the rate this year is 67 cents an hour this includes internet costs, phone expenses, electricity and gas and stationery. You can no longer claim these. Until February 28, 2023, you only need a record of “representative” hours worked from home. However, from March 1 you need a record of actual hours worked, you cannot make an estimate. You can still claim for a home office by apportioning costs such as phone, electricity, but not interest unless you are carrying on a business. But if you are carrying on a business watch out because a percentage of your home could be subject to capital gains tax when you sell.

Mobile phone and internet – can only be claimed if you do not claim home office. Also if your phone records do not detail your work use for one month including data then your claim is limited to $50 for phone and $50 for data.

Cleaning and laundry – expect scrutiny of your return if you are also claiming home office as there is an expectation that these claims will be less if you are in the office for less time.

Motor vehicle expenses – the rate for 2022-2023 is 78 cents a  kilometre up to a maximum claim of 5000 kilometres. Make sure you can justify your claim for kilometres travelled.

Rental properties – remember the golden rule that it’s the purpose of borrowing that determines the deductibility of interest. Be careful if you repay part of your mortgage and then redraw it. That redraw may not be tax deductible. It may be better to have an offset account. If you have a holiday home, make sure to apportion your costs correctly. Your claims for repairs on a new rental property may not be allowable if the need existed at the time of purchase. Lastly your Airbnb claims need apportioning.

Cryptocurrencies and CFDs – profits need to be included in your tax return and the ATO has information on your crypto trading.

Superannuation – if you have been drawing down a reduced pension you will now have to draw your full pension at the rate prescribed.

Budget announcements not yet law – If you are making donations this year, make sure the organisation is registered as a DGR so you can claim the deduction. Some changes to organisations were covered in the budget and will be legislated later. If your superannuation is close to or exceeds $3 million an additional tax has been proposed from July 1, 2025. Also from July 1, 2026, your employer will have to pay your super guarantee payments at the same time as your salary or wages.

This is just a brief summary but if you require more detail contact the experts at Gail Freeman & Co on 6295 2844, email info@gailfreeman.com.au or visit gailfreeman.com.au

Disclaimer
This column contains general advice, please do not rely on it. If you require specific advice on this topic please contact Gail Freeman or your professional adviser.
Authorised Representative of Lifespan Financial Planning Pty Ltd AFS Lic No. 229892.