Millions of Australians are now able to lodge their tax return with the opportunity to claim money back on several work expenses.
The consensus on making full use of the tax season including deductibles for working from home, clothing and transport is to keep records to back up your claim.
It comes as accountants warned Aussies working from home will be $1,300 worse off while low to middle income earners will see the end of their $1,500 tax break which finished today.
But despite this there are still ways millions can get the most out of their tax returns, including WFH expenses.
Financial planner from Acumen Cameron McLean said people can claim back costs like electricity when working from home as long as they have the proof
WORKING FROM HOME
Financial planner from Acumen Cameron McLean said people can claim back costs like electricity when working from home as long as they have the proof.
‘The Australian Tax Office needs you to be pretty specific,’ McLean told Nine News.
‘They need you to know specifically how many days you’re working, what part of the house gets used.
He added people should keep track of these throughout the year for the next tax return.
The ATO said tax payers can get deductions for stationery, energy and office equipment used in the home.
The agency said people wanting to make a claim need to work from home to fulfil employment duties and not be just carrying out minimal tasks like occasionally checking emails or taking calls.
Additional running expenses may include electricity or gas bills for heating, cooling and lighting as well as home and mobile internet expenses and mobile or home phone costs.
In limited circumstances where someone has a dedicated home office, you may also be able to claim for rent or mortgage costs and cleaning expenses.
WORKING FROM HOME RULE CHANGES
The Australian Taxation Office quietly changed the rules late last year so phone, internet, electricity and stationery costs will no longer be claimable as deductions on top of the approved shortcut method.
That shortcut method allowed people to claim 80 cents an hour for all the time they worked from home – without having to produce phone, internet and electricity payment receipts – but that method ended on June 30 last year.
But it wasn’t until November that the tax office announced a new 67-cent-an-hour rate would be introduced and backdated to July 1, 2022.
Under this new rule, those who use this shortcut when doing their tax returns for the 2022-23 financial year will not be able to also manually claim phone, internet, electricity and stationery costs – and must choose one method or the other.
The new 67-cent-an-hour rule has replaced both the flat 80-cent-an-hour rate and the lower 52-cent-an-hour rate for those who wanted to manually add up their phone and energy bills.
H&R Block director of tax communications Mark Chapman said the new 67-cent-an- hour fixed rate would stop professionals from being able to manually claim mobile and home landline phone costs, internet connection, stationery, and electricity and gas bills.
‘For the first time, phone usage and internet expenses are included in the fixed rate method,’ he told Daily Mail Australia.
H&R Block calculated that someone working from home for a year, under the old 80-cent rule, typically received a deduction of $1,536
‘Note that under the new rules, if you use your mobile phone for work purposes when you are out and about, as well as at home, you can no longer claim a separate deduction for this use and still use the fixed-rate method.
H&R Block calculated that someone working from home for a year, under the old 80-cent rule, typically received a deduction of $1,536.
This increased to $2,618 under the axed 52-cent rule, because someone could claim mobile phone, internet and stationery on top.
But under the new 67-cent-an-hour rule, that fell back to $1,286.40, as these items would not be claimable anymore.
That equates to a difference of more than $1,300 a year.
Those working from home will also be required to keep a diary of every day worked from home since March 1, 2023.
The tax office will accept a four-week summary covering July 1 to February 28.
Mr Mclean said Aussies can claim for clothes used for specific occupations.
A chef can claim for laundry expenses for their checkered pants for example as long as they have the receipts handy in case the ATO asks for them.
The ATO said workers who buy, repair or launder occupation-specific or protective clothing or distinctive uniforms can claim back.
But it said ‘conventional’ attire like black pants worn by office workers or waiters cannot be claimed back at tax time.
This includes business suits, a swimming instructor’s swimwear and jeans or drill shirts worn by tradespeople.
But it said ‘conventional’ attire like black pants worn by office workers or waiters cannot be claimed back at tax time
Tax payers can claim deductibles for the gifts and donations they offer to charities, as long as the organisation is registered.
Donations to crowdfunding platforms like GoFundMe cannot be claimed but registered charities like World Vision Australia could be.
The amount you can claim as a deduction depends on the type of gift, for example with gifts of money – you can claim the amount of the gift if it is more than $2.
In some circumstances, you can claim a deduction for gifts and donations to registered political parties or independent candidates.
The most you can claim in an income year is $1,500, the ATO said.
You can claim for the costs you incur when you travel between work places, to conferences or client meetings.
For motor vehicle expenses it helps if people keep a log book over a three-month period that gives an idea of how much they spend during the year.
You can also claim expenses for the same journeys when using public transport and ride-shares, short-term hire of a car, road and bridge tolls and parking fees.
For motor vehicle expenses it helps if people keep a log book over a three-month period, Mr McLean said
Aussies can get deductibles for courses if it relates to their current job
Aussies can get deductibles for courses if it relates to their current job but cannot claim if its to gain fresh qualifications for another occupation.
The ATO said parents cannot get money back for child care or school fees.
WHAT AUSSIES CAN’T CLAIM
The ATO said items like tools and computers used for private purposes can not be claimed.
Mr McLean said he has come across some strange items people try and claim for like socks, jocks and breast enhancement surgery.
A man even attempted to get money back for his daughter’s wedding telling him it’s for ‘all the tax he’s paid in his life’.
A comprehensive list on what cannot be claimed is available on the ATO website.
‘DON’T LEAVE IT TO THE LAST MINUTE’
Mr McLean said Australians should start preparing now for the next tax return so they don’t miss out on future tax benefits.
He urged tax payers to not leave it to the last minute and advised on having an accountant or financial advisor.
A financial advisor can have a look at someone’s super to see how much they can get back leading up to the new financial year.
The Low and Middle Income Tax Offset expired on June 30 last year which means nothing for those earning up to $126,000
LOW AND MIDDLE INCOME TAX OFFSET
Meanwhile, the Low and Middle Income Tax Offset expired on June 30 last year which means nothing for those earning up to $126,000.
Those earning $48,000 to $90,000 won’t get back $1,500 like they did last year.
That previously included the $1,080 and the one-off $420 cost-of-living bonus.
‘Many taxpayers won’t cotton on to that fact until they come to lodge this year’s tax return and they notice that the size of their refund has dramatically shrunk,’ Mr Chapman said.