Tax Return 2023 – Useful Tips from ATO

This post is about the 2023 tax return. Rates and thresholds have moved since: the working-from-home fixed rate is now 70 cents per hour. For the current year see our guide to income tax rates, the Medicare levy and SAPTO.

As tax season approaches in Australia, it’s important to be aware of the Australian Taxation Office (ATO) guidelines when it comes to lodging your tax return. In this post, we will briefly remind you the most important aspects of your tax returns, based on common errors that Australian taxpayers make every year.

How to Maximise Your Tax Deductions?

Discover the main tips and strategies that can help you make the most of your tax deductions. However, if you need professional support with your deductions, BTMH accountants can assist you in tracking your expenses effectively, identifying often overlooked deductions, and optimising your tax return.

Define Properly Your Work-Related Expenses

The ATO will prioritize ensuring that taxpayers understand the changes to work-from-home deductions and can substantiate their claims. The previous “shortcut method” (claiming 80 cents per hour) is no longer applicable. Instead, taxpayers can choose between the actual cost method or the revised fixed-rate method.

For the 2022-23 income year the revised fixed-rate method was 67 cents per hour, covering energy, phone usage, internet, stationery and consumables. However, it is essential to keep detailed records of all hours worked from home throughout the entire income year, rather than relying on estimates or a four-week representative diary. Read more here.

If You Have Rental-Property Deductions

The ATO will be scrutinising rental-property deductions, as previous audits revealed that nine out of ten rental-property owners made errors in their returns. Specifically, interest-expense claims will be closely examined. Taxpayers can only claim interest on loans used to purchase a rental property for the purpose of earning rental income. If the loan also covers private expenses, such as a car, interest deductions can only be claimed for the portion directly related to the rental property.

Calculate Capital Gains Tax (CGT)

Taxpayers need to calculate capital gains or losses when disposing of assets such as shares, cryptocurrencies, managed investments, or properties. It is crucial to accurately assess CGT obligations and declare gains or losses for each asset unless an exemption applies. Attempting to avoid declaring gains by assuming the ATO won’t notice is a risky strategy, as the ATO actively monitors such transactions.

Don’t Forget About Your Side Hustles and Gig Economy Income!

The ATO emphasizes the importance of declaring income earned from side hustles or gig economy work. If you engage in repeated activities for the purpose of making a profit, you are likely running a business. Running a business entails specific obligations, including registering for an Australian Business Number (ABN), maintaining accurate records, filing the appropriate tax returns, and potentially registering for the Goods and Services Tax (GST).

Remember to always keep the accurate records and do not hesitate to seek professional advice if needed. It will help you fulfill your tax obligations, and in the end, you will get the most of your potential deductions. In BTMH, we know how to manage taxes and optimise them either for individuals or businesses.

Book your appointment with us. Make sure you get the most out of your tax return!