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A taxing time

Photo - Elisa Ventur, Unsplash

By Tina Seirlis

It’s that time of the year that many of us love or loathe. For some it generates feelings of confusion, anxiety, escalating perspiration. An envisioned shadow over the shoulder, watching your every move, every expense, every kilometre. For others there is that joyous and slim feeling of hope and glass half full optimism, much akin to holding a lotto ticket and mentally having spent the winnings, identifying which friends and relatives will benefit from instant financial success paired with overwhelming generosity.

And down the middle there are the rest of us. Those who plod along each year, working and making a living, paying the escalating mortgage interest and utility bills, revising supermarket expenditure, and making sure we’ve dotted the i’s and crossed the t’s in preparation for our tax returns. And now that we have well and truly crossed into the new financial year, it’s time to start preparing. The Moorabool News spoke with Sue Forte from Seek Accounting services in Ballan to uncover the latest updates and tips. Sue says the ATO is doing some things differently this year that individuals need to be aware of.

“The ATO has discontinued the low to middle income tax offset this year which will reduce most taxpayer refunds by $1500,” she said.

“The working from home claims have also changed and people need to be aware of the new rates and rules. They also need to have very accurate records of hours worked from home, as estimates are not enough.”

Ms Forte said it’s really important to keep accurate records and all receipts.

“Any sales of cryptocurrency also need to be reported in your tax return.”

There are also many common mistakes that can result in individuals and business operators coming up on the ATO’s radar. According to Ms Forte these include:

– individuals claiming motor vehicle costs when they are not actually using the car for a genuine work purpose.
– or, if people claim their mobile phone without evidence of percentage use for business purposes.
– Investors with rental properties need to apportion the interest claim correctly, particularly if they have redrawn on the loan for personal use.

They will need to be able to calculate only the interest that relates to the rental property.

There have also been recent changes to the self-education expenses with the $250 non-deductible threshold removed for the 2022-23 income year.

For small business operators Ms Forte says, “an important factor coming into the new financial year is to note that from 1 July 2023, the instant asset write off has been reduced to just $20,000, from its previous value of $150,000”.

For more information in preparation for tax time, visit www.ato.gov.au