Aug 8, 2023 Joel Hernandez
What’s New in 2023? Key tax changes to be aware of
As we kick off the new tax season, it’s essential to be aware of the latest tax changes that may impact your 2023 tax return.
Here are some key changes that may affect you when lodging your 2023 individual tax return:
Low and Middle Income Tax Offset
The low and middle-income tax offset (LMITO) concluded on 30 June 2022, and is not applicable for the 2022-23 income year, marking the end of its temporary tax relief for eligible taxpayers. If you have previously been entitled to this tax offset, you will sure miss having it, as in many cases it resulted in a significant tax refund.
Removing the Self-Education Expenses Threshold:
The $250 non-deductible threshold for work-related self-education expenses has been eliminated from 2023 onwards. This means that from 1 July 2022 you no longer need to reduce your allowable work-related self-education expenses by $250 when calculating your deduction. The changes will also apply to the fringe benefits tax (FBT) year starting on 1 April 2023.
Working from Home Deductions:
Starting from 1 July 2022, if you work from home, you can claim a revised fixed rate of 67 cents per hour worked from home. If you apply this new method you will not be able to also claim for costs like mobile phone, stationery and internet, but you will be able to claim for work-related use of assets like office furniture and technology. There are strict record-keeping rules whereby from 1st March 2023 you are required to keep a record of all the hours you worked from home (eg a timesheet record, diary entry, etc.).
The previous “shortcut” method is no longer available, so you will be required to choose between the revised fixed rate method and the actual cost method when claiming for working from home.
If all this sounds way too confusing, just remember to give us details of your home office costs at tax time and we will work out the best claim for you.