It’s a new tax year!
Welcome to our Personal Tax Specialists 2022 Tax Time Update.
Your 2022 tax return
It’s hard to believe another financial year is nearly over, but that means it’s time to start getting your records together again for this year’s tax return. We will be emailing your ‘2022 Quick Update Form’ to you soon to make sure that we have all your details recorded correctly. On this form, you can also indicate which month you would like us to get started on your tax return this year.
When is tax season in Australia?
Tax time in Australia kicks off in July.
The ATO will start full processing of 2021–22 tax returns on 7 July 2022; they expect to start paying refunds from 16 July 2022.
How tax is calculated?
Income tax in Australia is calculated based on your income. Assessable income includes the income from your primary employment as well as income derived from other sources such as rental property or a side hustle. Certain Covid-19 payments are excluded from tax – see below.
A great tool to use is the tax calculator hosted by The ATO. This calculator helps you to calculate the tax you owe on your taxable income for the full income year. It can be used for the 2013–14 to 2020–21 income years.
Tax brackets Australia?
Individual income tax rate brackets are as follows:
Resident tax rates 2021–22
Tax on this income
0 – $18,200
$18,201 – $45,000
19 cents for each $1 over $18,200
$45,001 – $120,000
$5,092 plus 32.5 cents for each $1 over $45,000
$120,001 – $180,000
$29,467 plus 37 cents for each $1 over $120,000
$180,001 and over
$51,667 plus 45 cents for each $1 over $180,000
The above rates do not include the Medicare levy of 2%.
How long does it take for tax to update?
Most tax returns that are lodged online are processed within two weeks. The ATO processes paper tax returns manually and this can take up to 10 weeks (it may take up to seven weeks to show on their system). You can check the progress of your tax return using The ATO’s self-help services.
In order to avoid delays on your tax refund you should make sure that your banking information is 100% correct, your return has been completed correctly and that all assessable income has been included.
What expenses can I claim in my tax return?
You can claim some expenses that you have incurred if they are work-related expenses that you incurred in order to earn your income.
Some examples are motor vehicle expenses, travel expenses, self-education, work from home expenses, COVID-19 test expenses, Phone, data, and internet expenses, Tools, equipment, and other assets, Union fees, subscriptions to associations, and bargaining agents fees
If you are unsure about what expenses you can claim for in your occupation, have a look at the updated ‘what deductions can you claim’ page on our website.
Can I claim work-related expenses?
To claim a deduction for a work-related expense, it would need to comply with the following:
- You must have spent the money yourself and weren’t reimbursed.
- The expenses must directly relate to earning your income.
- You must have a record to prove it (receipt, logbook, travel diary).
What are records?
Records are written proof of your income or expenses that can be either electronic or paper.
When claiming certain deductions the ATO may require specific records. For example, when claiming travel expenses you may be required to keep a log book and when traveling for work you may be asked to provide a travel diary.
Records may include income statements, payment summaries, and receipts.
You need to keep records for 5 years (in most cases) from the date you lodge your tax return.
How do I lodge my tax return online?
You can choose to lodge your return yourself using myTax but you will need a myGov account and an active link to the ATO.
If you prefer to use a registered tax agent that can walk you through the process and help you get your return 100% correct, and claim all your deductions then speak to our team at Personal Tax Specialists.
We’re ready to assist you with your online tax return. Our 5 step process makes it quick, convenient and accurate. Read more about our 5 step process here.
What is the ATO targeting this year?
The ATO will be focusing on: record-keeping. work-related expenses, rental property income and deductions, and capital gains from crypto assets, property, and shares.
These are some tricky tax areas. Let us assist you.
Can I claim for working from home on my tax return?
Yes, download our WFH tax cheat sheet to find out if you’re eligible, what you can and cannot claim, and what methods to use when claiming.
Key changes in the 2021/2022 tax season for individuals in Australia:
This year there have been a few changes that will affect your tax return in the 2022 year and beyond. Some of the things that you might need to be aware of are:
- COVID-19 disaster payment:
If you received a COVID-19 disaster payment during the 2021–22 tax season because state or territory health orders prevented you from working in your regular employment. Then that payment is exempt from tax and you do not need to include the payment in your tax return.
- COVID-19 pandemic leave disaster payment:
If you received a pandemic leave disaster payment during the 2021–22 tax season, you must include it in your tax return as income.
These payments were made to eligible individuals who were unable to earn income because either they had to self-isolate or quarantine at home or they were caring for someone with COVID-19.
- Deduction for COVID-19 tests:
You can claim a deduction in the 2021–22 tax season for costs you incurred for COVID-19 test expenses. If you were required to test for a work-related purpose, such as determining whether you could attend or remain at work, you can claim it.
The test can be any test in the Australian Register of Therapeutic Goods, such as a polymerase chain reaction (PCR) test or rapid antigen (RAT) test.
To claim a deduction, you must have records to prove that you incurred the cost (usually a receipt) and that you were required to take the test for work purposes.
You can also claim a deduction for the cost of a COVID-19 test if you required the test to undertake travel away from your home overnight for work purposes.
- Working holiday maker:
If you work in Australia as a working holiday maker (WHM) subclass visa 417 Working Holiday or subclass visa 462 Work and Holiday (backpackers), your employer will withhold tax from your pay and you may need to lodge a tax return each year.
Most people who come to Australia for a working holiday, or to visit, are foreign residents for tax purposes. Whether you were an Australian or a foreign resident for tax purposes does not affect the rate of tax you pay.
However, you are eligible to be taxed as a resident Australian national (as a permanent resident of Australia or an Australian citizen) if, in 2021–22, you were:
– an Australian resident for tax purposes, and
– from a non-discrimination article (NDA) country (that is, Chile, Finland, Germany, Israel, Japan, Norway, Turkey, or the United Kingdom).
- Granny flat arrangements and CGT:
Since 1 July 2021, capital gains tax (CGT) does not apply when a granny flat arrangement is created, varied, or terminated. A granny flat agreement is a written agreement that gives an eligible person the right to occupy a property for life.
The CGT exemption only applies if all the following apply:
– The owner or owners of the property are individuals
– one or more eligible people have an eligible granny flat interest in the property
– the owners and the people with the granny flat interest enter into a written and binding granny flat arrangement. This arrangement must not be commercial in nature.
Normal CGT rules apply if there is no granny flat arrangement or if you are doing something other than creating, varying, or terminating a granny flat arrangement.
Feeling overwhelmed? We’ve got you covered!
Our Tax Preparation Team makes sure that your online tax return is completed correctly each year and that you receive the maximum refund possible. They will also provide answers to any technical tax questions you may have.
Each tax agent on our team is highly experienced in preparing tax returns for individuals, including those with more complex issues such as investment properties, dividends, capital gains tax & negative gearing, or GST.
Our team is continually maintaining and improving its knowledge and regularly attends Tax Office and Professional Association training seminars.
Get started with your online tax return today by learning more about our simple and convenient 5 step process.