It’s a new tax year!
Welcome to Personal Tax Specialists 2023 Tax Time Update.
2023 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 2023 tax return. We will be emailing your ‘2023 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.
If you’re not yet a client of ours but would like to lodge your tax return online with us, please head to our home page and click ‘Get Started!’
When is tax season in Australia?
Tax time in Australia kicks off on 1 July every year and runs until 31 October.
If you’re asking yourself those familiar questions like, ‘When is tax return 2023,’ ‘When can I lodge my tax return,’ or ‘How can I lodge my tax return,’ this article will cover that plus everything you need to know.
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.
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.
Tax brackets Australia?
Individual income tax rate brackets are as follows:
Resident tax rates 2022–23
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 2022/2023 tax season for individuals in Australia:
This year there have been a few changes that will affect your tax return in the 2023 year. The key changes are around work from home calculations and low and middle income tax offset (LMITO).
1. Low and middle income tax offset changes
For anyone who was earning up to $126,000, the LMITO provided a temporary tax cut. The greatest benefit of $1,500 was for anyone earning between $48,000 and $90,000 in 2021-22. As per this year’s federal budget, this tax offset has come to an end. Individuals earning less than $126,000 will likely see a reduction in their 2023 tax refund as a result.
2. Work from home deductions
The shortcut method that used to allow 80 cents per work hour is no longer available. The good news is that the fixed rate method has bumped up from 52 cents to 67 cents per hour.
Keep in mind though, the ATO folks are getting a bit more strict with record-keeping starting 1st March 2023. You can use an estimate of work hours based on a four-week diary for the period between 1st July 2022 to 28th February 2023, but starting 1st March 2023, they’re gonna need a written log of all work-from-home hours. Estimates won’t fly anymore.
If you’re planning to put in for work-from-home deductions in 2023, you’ll need to have that written log of all working hours from 1st March 2023 onward.
Another tweak this year – the fixed rate method now takes care of phone, internet, stationery, and computer consumable costs. If you opt for the fixed rate, these items can’t be claimed separately.
However, you can still put in a separate claim for depreciation on your office furniture and equipment. Those are all good to go.
3. Motor vehicle log-book requirements
It looks like the ATO has spotted some hiccups with vehicle claims using the ‘logbook’ method. A bunch of these claims last year had mistakes, leading to some irregularities. So, it looks like they’ll be ramping up audits in this space.
If you’ve been using the logbook method for your vehicle expenses and plan to do the same for your 2023 tax return, here’s what you need to keep in mind:
You’ve got to have a valid logbook maintained for a continuous span of at least 12 weeks anytime during the income years 2019 to 2022 (inclusive) for your car.
The logbook has to include:
- The start and end date of the 12-week logbook period.
- Your odometer readings at the start and finish of the logbook period.
- The total kms your car cruised during the logbook period, plus the total km travelled for income-earning purposes.
- Your car’s business use percentage during the logbook period.
Also, you have to detail each business journey in the logbook, including:
- The start and end date of the journey.
- The car’s odometer readings at the beginning and end of each journey.
- The total kms your car travelled on that journey.
- A detailed description of the purpose of each journey (heads up: the ATO won’t take ‘client visit’, ‘customer visit’, or ‘business trip’).
- Don’t forget those odometer records at the start and end of each financial year.
And remember, if your job or duties have changed, time to start a new logbook.
If there isn’t a valid logbook in place, your work-related car claims will be capped to the cents per km method. Just something to keep an eye on, okay?
4. 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 2022–23, 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).
5. Granny flat arrangements and CGT:
Since 1 July 2022, 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.