Changes to deductions this tax time
Taxpayers who are small business owners operating from home, or who use a vehicle for business purposes, need to be aware of some changes when claiming deductions this tax time, including the following.
Cents-per-kilometre method – The cents-per-kilometre method for claiming car expenses increased from 72 cents to 78 cents per kilometre in the 2023 income year. For taxpayers using this method, the 78 cents per kilometre rate covers all their vehicle running expenses, including registration, fuel, servicing, insurance, and depreciation. Taxpayers using this method cannot claim these costs separately.
Car limit for business owners – The car limit has also increased to $64,741 for the 2023 income year. The car limit is the maximum value taxpayers can use to work out the depreciation of passenger vehicles (excluding motorcycles or similar vehicles) designed to carry a load of less than one tonne and fewer than nine passengers.
Work from home business expenses – For the 2023 income year, the ‘fixed rate method’ (for taxpayers operating their business from home) increased from 52 cents to 67 cents per hour worked from home, and taxpayers are no longer required to have a dedicated home office space. The fixed rate method covers electricity, gas, stationery, computer consumables, internet, and phone usage. Taxpayers can also claim separate deductions for expenses not included in the hourly rate, such as the decline in value of depreciating assets, e.g., laptops or office furniture.
Lodging of Taxable payments annual reports
The ATO reminds taxpayers that it is now time for them to check if their business needs to lodge a Taxable payments annual report (‘TPAR’) for payments made to contractors providing the following services:
- building and construction
- cleaning
- courier and road freight
- information technology;,and
- security, investigation or surveillance.
TPARs are due on 28 August each year and penalties may apply if they are not lodged on time. Taxpayers can help prepare for their TPAR by keeping records of all contractor payments. Taxpayers that do not need to lodge a TPAR this year can submit a TPAR non-lodgment advice form to let the ATO know and avoid unnecessary follow-up.
Taxpayers can refer to the ATO’s website for more information about TPARs, including who needs to report and how to lodge.
Please contact Omnis Group in West Perth for any help with these claims, including record-keeping requirements.
