There has been a number of changes in regards to claiming deductions this tax time – some noteworthy changes are as follows:
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.
Work from home 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 under the ‘revised fixed rate method.’ Although you no longer require a dedicated home office to use this method, the hourly rate covers other expenses such as home internet, mobile phone usage, computer consumables and stationery.
Alternatively, you are able to use the ‘actual cost method’ to claim a deduction for the actual expenses you incur as a result of working from home – however, you are no longer to claim the fixed rate per hour worked from home in addition to these expenses.
Under both methods, 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.
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.
At Crest Accounting, our focus is to help our clients understand the taxation process and improve their tax position. Please contact our office if you would like assistance with these claims, including record-keeping requirements. Call (02) 4933 3466 to speak to one of our helpful team members today to enquire about our taxation services.