ATO unveiled it’s targets for 2023 tax time

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The ATO has a real focus on work related expenses. If yours is unusually high or in unusual categories, that’s bound to attract the ATO’s attention.

The ATO have occupation and industry specific guides to help you prepare for your tax return. You can use the guides below to:

  • work out what income and allowances to declare
  • check if you can or can’t claim work-related expenses as a deduction
  • find out what records you need to keep.

To claim a deduction for work-related expenses, you must meet the 3 golden rules:

  1. You must have spent the money and you weren’t reimbursed.
  2. The expense must directly relate to earning your income.
  3. You must keep records that show you incur the expense (usually a receipt).

Changes to working from home deductions for 2022-2023

Don’t be tempted to just copy and paste your prior years claims. A lot of people are now back in the office more compared to last year. If you had a big claim last year and another one this year, they may want to look at it. Make sure your record keeping is up to scratch – you want to be able to prove the deductions you claim are valid.

From the 2022–23 income year, the methods available to calculate working from home deductions are the:

  • revised fixed rate method
  • actual cost method.

While the actual cost method remains unchanged, the revised fixed rate method has been updated to better reflect contemporary working from home arrangements, making it easier to calculate expenses and avoid time-consuming apportionment calculations.

  • has increased from 52 cents to 67 cents per hour worked from home
  • removes the requirement to have a dedicate home office space
  • works out the claim for
    • electricity and gas
    • phone and internet usage
    • computer consumables
    • stationery
  • allows taxpayers to separately claim the work-related portion of the decline in value of depreciating assets – such as office furniture and technology.

The revised fixed rate method can also be used by businesses that operate some or all of their business from home to claim home-based business expenses.

from 1 July 2022 to 28 February 2023 – a record which is representative of the hours they worked from home

from 1 March 2023 to 30 June 2023 – a record of the total number of hours they worked from home (such as a timesheet, roster or diary) as well as evidence they paid for each of the expenses they incurred that are covered by the fixed rate method (for example, a phone or electricity bill). They will also need records for any equipment they bought to work from home, like technology or furniture (which provides details of the supplier, cost, date acquired).

Get prepared now –

Tax time is less than two months away, so it’s wise to start planning now and get your paperwork and statements in order so you have everything ready to go.