Tax and Super March 2023 Newsletter
The ATO has finalised its new compliance guidance around the requirements for work-from-home deductions. The fixed rate method has now been revised. The revised method increases the claim from 52 cents to 67 cents per-hour. However, this rate now includes internet, phone, stationery and computer consumables. The record-keeping requirements under the revised fix rate method are now more onerous, also. You now need to keep a record of actual hours worked from home. The ATO will no longer accept estimates, or a four-week representative diary. This requirement is effective immediately (1 March).
Do you have an urgent medical or dental procedure to pay for? The ATO released a record $573 million in superannuation on compassionate grounds during 2021–22. While normally superannuation must be preserved for retirement, there are certain exceptions. One of these is compassionate grounds which among other things provides for a release of benefits for medical or dental treatment. Last year 9700 individuals applied for compassionate release of super for dental treatment expenses, and 82% were approved. However, it should be noted that the grounds for release to pay for medical (including dental) treatment, require the applicant to demonstrate that they or a dependant are suffering life threatening illness or to alleviate acute or chronic pain or a mental disturbance. There is no lifetime limit on the number of applications for release that you can make.
Meanwhile, with the end of the FBT year looming, car logbooks need to be in order for FBT purposes. Logbooks are valid for five FBT years (including the year the logbook is prepared), provided there is no significant change in the vehicle’s business use. Once the five-year period expires, a new logbook will need to be maintained if you wish to continue using the operating cost method. Therefore, if a logbook was last prepared in 2017/18, a new logbook is required for this FBT year (2022/23).
This edition features pieces on:
Crystalising capital losses: It’s been a tough 12-mothns for investors. However, a loss on an investment is only realised if you dispose of the asset. If you retain the asset, you may be able to ride things out and hopefully the market bounces back. Even where you do sell and incur a capital loss, there can be a silver lining from a tax perspective.
PAYG instalment variations: The ATO is encouraging accountants to educate clients around varying PAYG instalments – this can potentially assist cashflow. If your or your business’s financial situation has changed for the worse, varying your PAYG instalments downwards can help with cashflow which can be a significant problem for small business. There are however dangers in varying.
Legislating the purpose of superannuation: Treasury released a consultation paper on legislating the purpose of superannuation. However, as noted in the paper, the purpose of legislating such an objective is to guide future policy makers rather than lay the groundwork for changes to existing superannuation settings.
Changes to claiming work-from-home deductions: Are you one of the five million Australians who claim work from home deductions? If so, stricter record-keeping requirements may now apply from 1 March 2023. A new, increased cents per hour rate is also now available.
Super teething issues: Last year 9,700 individuals applied for compassionate release of super for dental treatment expenses, and 82% were approved. Out of those approved, 9% were for a dependent child’s dental treatment, which could include braces. What are the rules around making a claim?
FBT and car logbooks: The majority of employers calculate any car fringe benefits under the logbook method. As we approach the end of the FBT year, logbooks need to be in order, including adequate descriptions of trips, odometer records and more!
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