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The Prestige Partners team has answered the most popular questions relating to your personal income tax, relating to the best deductions to claim and what to look out for when completing your income tax return.
Q: Can I claim any deductions without receipts?
A: You can claim up to $300 in deductions without receipts (In total – not each item), you can also claim up to $150 for laundry without receipts too!
Q: Can I claim car expenses for work travel?
A: If you use your car for work related journeys (other than your commute to and from work), it is likely you can claim your car expenses on your tax return. There are two car deduction methods:
- Cents per KM method
- Car logbook method
Cents per KM method:
- Claim up to 5000km per year
- No logbook required
Cents Per Kilometer Rates:
|2023-2024||85c per KM|
|2022-2023||78c per KM|
|2021-2022||72c per KM|
|2020-2021||72c per KM|
|2019-2020||68c per KM|
|2018-2019||68c per KM|
- Keep a logbook for 12 continuous weeks
- You must own the car
- A completed logbook is valid for 5 years if your pattern of use remains consistent
- If you change employment or your consistency of driving changes, you will need to create a new logbook.
- You must record all business trips & personal trips in your logbook
- Keep all receipts, registrations and expenses relating to your car, including:
- Interest on loan costs
- Other running costs
Q: Why is my return less than last year?
A: There could be a few reasons as to why your tax return refund doesn’t look so great as in previous years by the following:
- Your refund could have been offset against other debt you may have, such as outstanding income tax debt, outstanding BAS or activity statement payments or fines and penalties.
- There could be a difference between the details of your tax return and the pre-fill information data.
- Your income or deductions are different as in previous years.
One of the major reasons of seeing such a low refund, or even a payable return, is the discontinuation of the low and middle income tax offset (LMITO), which saw over 10 million Aussie’s be short of up to $1,500 for their 2022-2023 tax return.
So, if you have a discrepancy of about $1,500 in your 2022-2023 return refund, the missing LMITO could be the cause.
Q: If I work from home for a few days a week, what records do I need to provide?
A: To claim working from home expenses, you must meet the following criteria:
- Working from home to fulfill your employment duties, not just carrying out minimal tasks, such as occasionally checking emails and taking calls.
- Incur additional running expenses as a result from working from home.
- Have records show you incurred these expenses.
Running expenses relate to the use of facilities within your home. These expenses are generally considered private or domestic expenses. You can claim a deduction for additional running expenses you incur as a result from working from home. These expenses include:
- Electricity or gas (energy expenses) for heating, cooling, and lighting
- Home and mobile internet or data expenses
- Stationery and office supplies
- The decline in value of depreciating assets you use for work – e.g office furniture, laptops, and software. This also includes the repairs of these depreciating assets.
- In limited circumstances where you have a dedicated home office, you may be able to claim occupancy expenses (such mortgage interest or rent) and cleaning expenses.
From the 1st of July 2022, there are two methods available to calculate your claim:
- Revised fixed rate method
- An amount per work hour for additional running expenses
- Separate amount for expenses not covered by the revised fixed rate such as the decline in value of depreciating assets
- You no longer need a dedicated home office
- Actual cost method
- The actual expenses you incur as a result of working from home
|Actual Cost||Always Available||Calculate actual costs|
|Fixed Rate Method||1 July 2018 to 30 June 2019
1 July 2019 to 30 June 2020
1 July 2020 to 30 June 2021
1 July 2021 to 30 June 2022
|52 cents per work hour|
|Short Cut Method||1 March 2020 to 30 June 2020
1 July 2020 to 30 June 2021
1 July 2021 to 30 June 2022
|80 cents per work hour|
There are expenses you can’t claim from working from home, such as:
- Coffee, tea, milk or other general household items, even if your employer provides these at work
- Items your employer provides, for example a laptop or mobile phone.
- Expenses your employer has already reimbursed the cost for.
Q: What is a division 293 notice?
A: A Division 293 notice is an additional tax on super contributions, reducing the tax concession for individuals whose combined income and concessional contributions for Division 293 purposes is more than $250,000. Division 293 tax is charged an additional 15% of the excess over the threshold or the taxable super, whichever is less.
If you are liable, the ATO will send you an “Additional tax on concessional contributions (Division 293) notice” after they receive both your income tax return and contribution information. Even though you may not normally have an income in excess of the Division 293 threshold, certain events can increase your income to this level for a particular year. For this reason, a Division 293 may apply to you for one year where:
- You receive an eligible termination payment
- You make a capital gain
- Your income increases for another reason
You can pay your Division 293 via the following options:
- With your own money
- By electing to release money from your super
Q: I just got married this year, do we have to do a joint return and when should I recognize my defacto relationship?
A: You don’t have to lodge a combined tax return if you’re married (It may apply in other countries). Your joint income is recorded separately in each spouse’s tax return.
The benefits of addressing your relationship as “defacto” it would include:
- Your income is assessed jointly and referred to as “family income”
- The ATO use your joint income to calculate family tax offsets such as Medicare levy and Medicare levy surcharge.
- Private health cover rebates
Q: What can I do to improve my chances of receiving a refund, rather than a payable?
A: We would recommend the following:
- Claim all the tax deductions you are allowed to claim
- Keep all of your receipts and purchase records
- Make donations to charities and non-profitable organisations
- Look at salary sacrificing or if you are self-employed, look at commencing PAYG instalments
- Use an accounting service – Like Prestige Partners!
The above should hopefully point you in the correct direction of some good habits and things to look out for when it comes to your income tax return.
Please use the below link if you would like Prestige Partners to begin your 2023 income tax return!
If you require more information, or would like to speak with our knowledgeable team, please don’t hesitate to contact us!