With another financial year behind us, it’s time for you to start thinking about lodging your Income Tax Return (ITR) for 2022. There have been numerous changes relating to what you can deduct in your ITR, and it’s important you understand these changes and note what you may be entitled to claim in your return.
What changes do I need to be aware of when lodging my Income Tax Return?
1. Low and Middle Income Tax Offset (LMITO)
The LMITO will continue to be available in the 2022 financial year, however it has been increased by a one off payment of $420.
The offset is available to taxpayers with a taxable income between $37,001 and $126,000. Taxpayers will receive a benefit depending on their level of income ranging from $675 to $1,500.
2. New Tax Deductions for Covid-19 Tests
You can claim a deduction for the cost of a Covid-19 test as of 1 July 2021. The tests are only tax deductible when the purpose of the test is to determine whether the individual can attend or remain at a place of work or business.
If you use a Covid-19 test for private purposes eg in relation to a leisure activity, private travel, to test children, or for the prospect of future employment then the expenditure is not deductible.
If an Employer has reimbursed the cost of the Covid-19 test then it is not deductible.
3. Home to Work Travel
A new ATO travel concession allows more employees to claim home to work travel. Usually, travel from home to the workplace is not deductible. This has now changed when ‘home’ has become your primary place of work. If you are working from home and travel to a workplace to continue your work for the same employer, you can claim the cost of this travel.
4. Working From Home
The ATO has extended the temporary shortcut method of $0.80 per hour for calculating deductions relating to the costs incurred as part of employees working from home due to Covid-19 restrictions.
This shortcut method is an all-inclusive rate available for employees who worked from home during the 2022 financial year. Other methods, including the fixed rate and the actual expense methods, also remain available for employees to claim a deduction for expenses related to working from home.
How we can assist you with your 2022 Income Tax Return
Download our Resources
At Davidsons, we want to make your tax return experience as convenient and hassle free as possible. To help with your preparation you can download our Tax Return Checklist and our Investment Property Checklist, which both list things to consider.
Book a catch up with our specialists
Our team, including our Personal Income Tax Specialist Janine Roberts, are additionally here to support you. If you have any questions in relation to your 2022 Income Tax Return, or you would like to schedule a catch up with Janine, contact us on either 03 5221 6399 or firstname.lastname@example.org.
This article was written by Personal Income Tax Specialist Janine Roberts.
Disclaimer: this information is of a general nature and should not be viewed as representing financial advice. Users of this information are encouraged to seek further advice if they are unclear as to the meaning of anything contained in this article. Davidsons accepts no responsibility for any loss suffered as a result of any party using or relying on this article.