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Personal Income Tax Plan passed

The Personal Income Tax Plan announced as part of this year’s Federal Budget has been passed by Parliament.

The plan introduces:
– a new low and middle-income tax offset to reduce the tax payable by low and middle-income earners in the 2018-19, 2019-20, 2020-2021 and 2021-2022 income years
– a new low-income tax offset from the 2022-23 income year
– changes to income tax rate thresholds in the 2018-19, 2022-2023 and 2024-2025 income years

Income tax rate thresholds for the relevant income years are as follows:

2018-19, 2019-20, 2020-21 and 2021-22 income years: Increase the top threshold of the 32.5 per cent tax bracket from $87,000 to $90,000.

2022-23 and 2023-24 income years: Increase the top threshold of the 19 per cent tax bracket from $37,000 to $41,000. Increase the top threshold of the 32.5 per cent bracket from $90,000 to $120,000.

2024-25 income year onwards: Increase the top threshold of the 32.5 per cent tax bracket from $120,000 to $200,000.

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No More Shortcuts: The Methods You Can Use To Claim WFH Expenses

March 25, 2024

Ensure you’re up to date on how to claim your working-from-home expenses!

As the business landscape shifts back and forth between office, hybrid and home-based work opportunities, it’s important to remember what methods are available to you when it comes to claiming. If part of your role allows you to work from home, you may be able to claim certain expenses on your tax return this year using one of the following methods.

The Revised Fixed Rate Method:

Under the revised fixed rate method, individuals can claim 67 cents per hour worked from home during the relevant income year. This rate includes additional running expenses, such as home and mobile internet or data, phone usage, and electricity and gas for heating, cooling, and lighting. Importantly, using this method, you cannot claim separate deductions for these expenses.

To use this method, taxpayers must maintain records of the total number of hours worked from home and the expenses incurred while working at home. Additionally, they must keep records of expenses not covered by the fixed rate per work hour, demonstrating the work-related portion of those expenses.

What Records Do You Need?

Previously, taxpayers required a dedicated workspace at home. From 1st March 2023 onwards, the record-keeping requirement has shifted again, necessitating the recording of all hours worked from home as they occur.

How Does The Fixed Rate Method Work?

To utilise the revised fixed rate method:

The Actual Cost Method:

Alternatively, taxpayers can opt for the actual cost method, where deductions are calculated based on actual additional expenses incurred while working from home. This includes expenses for depreciating assets, energy expenses, phone and internet, stationery, computer consumables, and cleaning dedicated home offices.

What Records Do You Need?

To claim work-from-home expenses using actual costs, you must maintain records showing:

How Does The Actual Cost Method Work?

To claim actual expenses:

Australians need to understand their entitlements and tax deductions while working remotely.

Consulting with a tax advisor can provide valuable insights into available concessions, deductions, and offsets for your tax return.

By staying informed and adhering to ATO guidelines, taxpayers can ensure compliance and make the most of available deductions in the evolving landscape of remote work. Why not start a conversation with us today?