REMOVING THE $250 REDUCTION FOR SELF-EDUCATION EXPENSES
Before 1 July 2022, you were required to reduce allowable work-related self-education expenses by $250 to calculate your deduction. You could however, offset the $250 reduction through self-education expenses that were not normally deductible.
From 1 July 2022, if you are claiming a deduction for self-education expenses:
- no longer need to reduce your allowable expenses by $250; and
- can claim a deduction for all allowable self-education expenses.
You must continue to keep records of your allowable self-education expenses.
The changes also apply to the fringe benefits tax (FBT) year starting on 1 April 2023.
For more information see Self-education expenses.
WORKING FROM HOME DEDUCTIONS
The working from home deduction methods have also changed for this year. You can no longer use the shortcut method, this method ended 30 June 2022.
You can choose one of two methods to claim working from home deductions, either the actual cost method or fixed rate method. Only the fixed rate method is changing.
The fixed rate method for calculating your deduction for working from home expenses has been revised. The revised fixed rate method allows you to claim 67c per work hour and is available from 1 July 2022.
The fixed rate method has been revised to:
- increase the rate per work hour that you can claim when you work from home
- change the expenses the rate covers
- change the record keeping requirements
- remove the requirement to have a home office set aside for work.
You can also separately claim a deduction for the work-related use of depreciating assets such as office furniture and technology. This fixed rate method has more onerous record keeping requirements in relation to establishing the hours worked, and modifies the expenses covered when compared with the previous set rate method.
If you do not use the revised fixed rate method, you need to use the actual cost method.
For more information on the changes see Working from home deduction changes for 2022-2023 and Working from home expenses.
CENTS PER KILOMETRE RATE CHANGE
The new cents per kilometre rate is 78 cents for 2022–2023 income year but remember to keep written evidence to show how you worked out the work-related kilometres. This method is available to sole traders and partnerships.
The car limit has increased to $64,741 for the 2022–2023 income year.
For more information see Cents per kilometre method.
LOW AND MIDDLE INCOME TAX OFFSET
The low and middle income tax offset (LMITO) ended on 30 June 2022. It is not available for 2022–2023 income year.
The outcome of your 2023 tax return may be different than in previous income years. You may have a lower tax refund or now receive a tax bill.
Your tax return outcome may also change for any of the following reasons:
- A tax offset you received previously is no longer available or you are no longer eligible for an offset – for example, the LMITO ended on 30 June 2022.
- Your credit or refund has been offset against another debt – including debts on hold with the ATO or debts you have with other government agencies.
- Your income or deductions for the income year are different from previous income years.
- The ATO find a difference between the details in your tax return and the information they receive through pre-fill data or their data matching program.
- You have not advised your payer of your study or training support loan and your income is above the minimum repayment threshold and you have a compulsory repayment amount.
- Some debts will not be applied to your tax return until after it is lodged. This means your tax estimate in myTax or from your registered tax agent may not match your final tax outcome.
If you believe you will get a tax bill, it is still important to lodge your tax return on time even if you cannot pay immediately.
VETERANS' SUPER (INVALIDITY PENSION) TAX OFFSET
The veterans' superannuation (invalidity pension) tax offset (VSTO) is a non-refundable tax offset. This tax offset ensures veterans, and their beneficiaries do not pay more tax. It applies from the 2007–2008 income year.
You do not need to apply for the VSTO. The ATO will work out if you are entitled to a VSTO amount after you lodge your tax return.
DOWNSIZER CONTRIBUTIONS
The age an eligible individual can make a downsizer contribution to their superannuation has changed. If you have reached the eligible age, each individual may be able to contribute up to $300,000 from the proceeds of the sale (or part sale) of their home into their superannuation fund.
To make a downsizer contribution; the eligible age is as follows:
From 1 January 2023, 55 years old or older
From 1 July 2022, 60 years old or older
From 1 July 2018, 65 years old or older.
For the full eligibility criteria and other details, see Downsizer contributions for individuals.
SMALL BUSINESS SKILLS AND TRAINING BOOST
The Treasury Laws Amendment (2022 Measures No. 4) Act 2023 provided for a temporary skills and training boost for small businesses in the form of a bonus deduction. Small businesses (with an aggregated annual turnover of less than $50 million) can claim the bonus deduction as an additional 20% deduction, on top of their ordinary deduction, for expenditure incurred for the provision of eligible external training courses to employees by eligible registered training providers in Australia.
It applies to eligible expenditure incurred from 7:30 pm (AEDT) on 29 March 2022 until 30 June 2024. Special rules provide for the income year in which the bonus deduction can be claimed.
For more information on eligibility and if you can claim the small business boost, refer to Small business skills and training boost.
SMALL BUSINESS TECHNOLOGY INVESTMENT BOOST
The Treasury Laws Amendment (2022 Measures No. 4) Act 2023 provided for a temporary technology investment boost for small businesses in the form of a bonus deduction. Small businesses (with an aggregated annual turnover of less than $50 million) can claim the bonus deduction as an additional 20% deduction, on top of their ordinary deduction, for eligible expenditure incurred and depreciating assets acquired, for the purposes of their digital operations or digitising their operations. The maximum additional deduction is $20,000 per income year.
It applies to eligible expenditure of up to $100,000 per income year incurred from 7:30 pm (AEDT) on 29 March 2022 until 30 June 2023. Special rules also apply if claiming the bonus deduction for eligible expenditure on a depreciating asset.
For more information on eligibility and if you can claim the small business boost, see Small business technology investment boost.