tax guide 2023

Tax Guide 2023 – Unraveling the fresh initiatives for filing your returns!

Tax Guide 2023 – Unraveling the fresh initiatives for filing your returns !
2023 marks a significant year for taxation and deductions in Australia as, several changes and updates have been implemented. Let’s delve into the key highlights.

A. Updated method for working from home expenses :
The method for calculating deductions for working from home expenses has been updated in 2023. The revised fixed rate is now $0.67 per work hour, effective from 1st July 2022.

Increased rate per work hour eligible for claiming when working from home.

Modified coverage of expenses under this revised rate.

Altered record-keeping requirements for using this method.

Eliminated necessity for having a designated home office space for work.

Additionally, you can separately claim deductions for the work-related use of depreciable assets like office furniture and technology.

It’s important to note that the previous shortcut method is no longer applicable, and if you choose not to use the revised fixed rate method, you must utilize the actual cost method for calculating deductions.

These expenses should be reported at question D5 of the Individual Income Tax Return (IITR).

B. Say goodbye to limits – self-education expenses threshold removed:
Great news! Starting from the 2022–23 income year, the $250 non-deductible threshold for work-related self-education expenses has been completely removed. This means you are no longer required to reduce your allowable expenses by $250 to calculate your deduction. The changes also apply to the fringe benefits tax (FBT) year starting on 1 April 2023.

The changes to the fixed rate method include:

When reporting these expenses on your Individual Income Tax Return (IITR), you won’t see a non-deductible category E for work-related self-education expenses in question D4. This change applies to both myTax and myDeductions within the ATO app.

You still need to maintain records of your deductible self-education expenses. However, any non-deductible self-education expenses that were previously offset against the $250 threshold no longer require record-keeping for tax purposes.

C. Last call for LMITO (Low and Middle Income Tax Offset):
Starting from 1st July 2022, the low and middle income tax offset (LMITO) has come to an end, and it will not be available for the 2022–23 income year.

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