To help you understand the types of opportunities you should be discussing with your tax advisor this income year, we’ve compiled a list of tax planning items that may be relevant to you. To be able to claim for any of these items, you must have purchased the item yourself for income producing purposes, have not been reimbursed, and you must also have a receipt to substantiate your claim.

Home office expenses

If you are an employee and worked from home during the year, you may be able to claim a tax deduction for home office expenses. There are two methods to choose from:

1. Revised fixed rate method

For periods from 1 July 2022, you can claim a rate of 67 cents per hour, which encompasses electricity and gas, phone and internet expenses, stationery and computer consumables. You cannot separately claim a deduction for these costs when using this method. However, you can claim a deduction for the decline in value of office furniture and computer equipment used in your home office.

You do not need to maintain a separate home office or dedicated work area at home to use this method.

To apply the revised fixed rate method, you must:

• Work from home while carrying out your employment duties or carrying on your business on or after 1 July 2022;

• Incur additional running expenses that this method covers (such as electricity and gas, or phone and internet expenses), which are deductible as a result of working from home; and

• Maintain a record of the total number of hours you work from home and keep at least one document for each of the additional expenses you incur while working at home.

It is important to note that you must maintain a logbook of all hours worked from home. From 1 March 2023, the ATO will no longer accept an estimate of hours worked or a 4-week representative diary.

2. Actual cost method

Claim the actual work-related portion of all your running expenses, which you must calculate on a reasonable basis.

The following must be satisfied to make a claim:

• You have spent the money yourself and have not been reimbursed;

• The claim is directly related to earning your income;

• You have maintained records to substantiate the claim such as a diary of days worked from home and copies of tax invoices.

Personal deductible superannuation contributions

The concessional contributions cap is $27,500 for the 2023/24 financial year.

Any unused concessional caps from the previous five years, starting from 1 July 2018, can be carried forward to make additional concessional contributions. The total value of your superannuation fund account balances must have been less than $500,000 on 30 June of the previous year to be able to carry forward the unused caps.

Individuals can make additional personal superannuation contributions within these cap amounts before 30 June 2024 and receive a tax deduction for doing so. Whilst the contribution is assessable to your superannuation fund at 15%, it is likely that the rate of deduction for the contribution you make in your hands will be higher, thus making additional personal concessional contributions to superannuation will result in an immediate tax benefit.

You are required to submit a Notice of Intent to Claim or Vary a Deduction for Personal Super Contributions form to your superannuation fund by the earlier of:

• The date you lodge your income tax return; and

• The last day of the income year after the income year in which you made the contributions (typically the following 30 June).

High income earners

An additional 15% tax on concessional superannuation contributions applies to individuals who earn more than $250,000 per annum. High income earners should consider this when contemplating whether to make additional personal superannuation contributions this year.

Spouse contributions tax offset

You may be able to claim a tax offset of up to $540 if you make a contribution to your spouse’s superannuation fund.

The maximum offset is calculated as 18% of the lesser of:

• $3,000, reduced by $1 for every $1 that the sum of your spouse’s assessable income, total reportable fringe benefits and reportable employer superannuation contributions for the year was more than $37,000.

• The total of your contributions for your spouse for the year.

Superannuation co-contribution

Where 10% or more of your total income comes from employment-related activities and/or carrying on a business and your income is below $43,445, you may be entitled to receive a government co-contribution of up to $500 where you make an after-tax contribution into your superannuation fund of $1,000. The co-contribution phases out once your income exceeds $58,445 (2023/24).

Study and training loans

If you have a study loan such as a Higher Education Loan Program (HELP) debt or a Trade Support Loan (TSL), you are required to make a compulsory loan repayment once your repayment income (taxable income plus net investment losses, total reportable fringe benefits, reportable superannuation contributions and exempt foreign employment income) reaches $51,550 (2023/24).

As your repayment income increases, the repayment rate increases.

If you plan to pay out the remaining balance of your study loan or if you simply want to make a partial voluntary repayment, you should do this prior to 1 June to reduce the balance on which indexation is calculated.

Once your study loan has been repaid, you should notify your payroll department so they stop withholding extra tax from your wage. This will result in you receiving a greater amount of cash in hand each pay run going forward, rather than waiting until you lodge your tax return to claim the withholding tax back.

Motor vehicle deductions

You can claim a deduction for motor vehicle expenses where you are required to use your private car in the course of your employment duties. You cannot claim home to work travel, or if your vehicle is salary packaged (e.g. under a novated lease).

You can calculate your claim under either of these methods:

1. Cents per kilometre method

Claim 85 cents per km (2023/24) up to a maximum of

5,000 km.

2. Logbook method

Maintain a logbook over a period of 12 continuous weeks to determine the business-use percentage for claiming car running costs such as fuel, registration, insurance, repairs and depreciation.

Medicare levy surcharge

If the sum of your taxable income, reportable fringe benefits, net investment losses and reportable superannuation contributions exceeds $93,000 for singles or $186,000 (plus $1,500 for each dependent child after the first one) for families, and you and your dependents do not have an appropriate level of private patient hospital cover, you may be liable for the Medicare levy surcharge.

The surcharge is an additional levy on your taxable income plus reportable fringe benefits that ranges from 1% to 1.5% depending on your income level.

Consider whether the cost of an appropriate private health insurance policy will be cheaper than paying the Medicare levy surcharge.

Note that the Medicare levy surcharge is pro-rated based upon the days in the year that you were not covered by an appropriate level of cover.

Donations

You can claim a deduction for gifts or donations over $2 made to an organisation that is registered as a deductible gift recipient (DGR).

Note that donations to crowdfunding campaigns may not be deductible as many of these are not operated by a DGR. You can check if an entity is a DGR by searching the DGR Listing site.

Cryptocurrency

The ATO continues to have a focus on taxpayers who have been trading cryptocurrency and non-fungible tokens (NFTs). As an investor, capital gains tax will apply if you buy, sell, swap for fiat currency, or exchange one cryptocurrency for another. The ATO has wide access to information from cryptocurrency exchanges and other financial institutions to identify taxpayers who have transacted in these assets.

You should maintain documentation on your trades so that you can accurately calculate your gains and losses.

Personal protective equipment

You may be able to claim a deduction for personal protective equipment (PPE) where your job requires you to be in close physical contact with customers or clients, or your job involves cleaning premises.

Items you may be able to claim include gloves, face masks, sanitiser, or antibacterial spray. This may be relevant to industries such as healthcare, cleaning, aviation, hair and beauty, teaching, retail and hospitality.

Zone and overseas forces tax offsets

Where your usual place of residence is in a remote or isolated area (as listed on a prescribed list of zones) for 183 days or more, you may be eligible to claim the zone tax offset.

Where you are a member of the Australian Defence Force or a United Nations armed force, you serve in a specified overseas locality, and your income relating to that service is not specifically exempt from tax, you may be eligible to claim the overseas forces tax offset.

Advise your tax advisor if you reside in a remote area or work overseas in the armed forces to determine if you are eligible to claim a tax offset.

Medicare levy exemption

You may be eligible for a full or partial exemption to the Medicare levy if you fit within one of the following categories during all or part of the income year:

• You were a blind pensioner;

• You received a sickness allowance from Centrelink;

• You were entitled to full free medical treatment for all conditions under either Defence Force arrangements, or the Veterans’ Affairs Repatriation Health Card (Gold Card);

• You were a foreign resident;

• You have a Medicare Entitlement statement showing you were not entitled to Medicare benefits because you

• were a temporary resident;

• You were a member of a diplomatic mission or consular post in Australia.

Advise your tax advisor if any of the above categories are applicable to your circumstances to determine if you are eligible for a Medicare levy exemption.

Take advantage of various tax-planning opportunities to help optimise your tax position and ensure you make the most of the tax deductions available to you through the assistance of a Findex tax advisor.