FY 2023-24 - It’s tax return time again!
Photo credit - Photo by nasirkhan on depositphoto
Yes, it’s that time of year again!
Having to do your tax return each year is unavoidable for most of us, so here’s some of the basics, and also a few changes to know about when you’re doing your 23/24 return.
Here are some general warnings from the Australian Tax Office:
The ATO has warned taxpayers against dodgy deductions;
Doing a copy and paste of your tax return lodgement details from previous years (because this year is NOT the same!);
There are occupation and profession-specific guides to help you understand what’s claimable; and
Keep records – to claim any deductions.
You must have spent the money yourself without being reimbursed by your employer; and
Any claim must be directly related to earning your income.
There are also some specific changes that the ATO has highlighted as part of its announced priorities for this tax time.
Incorrectly claiming work-related expenses
Inflating claims for rental properties
Failing to include all income when lodging
Read the ATO announcement here.
1. The new stage 3 tax cuts
From 1 July this year, these changes will:
reduce the 19% tax rate to 16%
reduce the 32.5% tax rate to 30%
increase the 37% tax threshold from $120,000 to $135,000
increase the 45% tax threshold from $180,000 to $190,000.
You can estimate your tax cut here
2. Work related expenses in detail!
In 2023, the ATO revised the fixed rate method of calculating a working from home deduction to broaden what is included, increase the rate, and adjust the records you need to keep.
These changes are now in full effect this financial year, meaning you must have comprehensive records to substantiate your claims as you would for any other deduction.
Copying and pasting your working from home claim from last year may be tempting, but this will likely mean ATO will be contacting you for a ‘please explain.
3. Rental properties
ATO data shows that 9 out of 10 rental property owners are getting their income tax returns wrong.
The Tax Office website has a detailed guide on how to treat rental income and expenses, including residential rental property assets and items.
What else is new…
Student loan fee relief
More than three million Australians have some form of student debt and the government is proposing to change how loan amounts are calculated. The revised calculation will reduce the indexation figure applied to the repayment amount for HELP (and other student loan schemes).
The plan doesn’t wipe out HECS debts entirely, but rather backdates a change to how interest on student loans is calculated to last year, so many people will get refunds (or lesser amounts owing) on their tax debt.
Australians with a HECS debt can find out how much the change is estimated to benefit them using the HELP Indexation Credit Estimator.
The government will backdate this relief to all HECS-HELP, VET Student Loan, Australian Apprenticeship Support Loan and other student support loan accounts that existed on June 1, 2023.
What will change?
The proposed change will apply the lower of the Consumer Price Index or the Wage Price Index - the rate of indexation will reduced from
◽ 7.1% to 3.2% in 2023 and
◽ 4.7% to around 4% in 2024.
When to lodge:
ATO advises waiting until late July to lodge your return, as they need to lodge prefilled information from your employer, bank and health insurer. However CPA Australia notes that many people are planning to lodge their returns as soon as possible.
As well…
The Australian Taxation Office (ATO) has identified the top 10 tax myths it says are causing incorrect claims at tax-time. Read it here - Busted! The top 10 tax myths
Next steps:
If you have questions relating to your tax and super needs, call us for a quick chat or drop us a line.
Want to get ethical?
We’ll help assess your intended investment against your priorities. We’ll work through what ethical mean to you, and how the companies you’re interested in manage environmental, social and governance issues (ESG) in their business.
Get our Guide to Ethical Investment with everything you need to get started
Stay on top of your finances
Getting your finances in order is one thing. Staying on top of them is something else again. A change in government policy, new legislation or amended regulations can have a powerful impact on how your finances are structured.
Subscribe to our regular newsletter to stay up to date with all the latest developments and changes.
Uncertain what to do next? Got questions?
Get certainty, direction and answers. Contact us now to talk through any issues you’ve got.
Together, we’ll get your money doing what you care about.