Tax deductions introduced by the Australian Taxation Office to lessen the impact of COVID-19 are approaching the end of their eligible timeframe. To ensure that you or your business do not miss out, here are some of the deductions you could claim at the end of this financial year (if eligible).
Loss-Carry Back Rules
Eligible businesses with an aggregated turnover of less than $5 billion or corporate tax entities that meet an alternative $5 billion total income test are able to use the temporary fill-expensing measure again this year. This will allow them to deduct the full cost of eligible depreciating assets acquired from 6 October 2020 and first used or installed ready for use by 30 June 2023. The original deadline of 30 June 2022 was extended for an additional year, so make sure to make use of this in your business!
Shortcut Method
If you have had to work from home over the last year between 1 July 2021 to 30 June 2022, you can claim a deduction for working from home.
This is to address expenses that you may have had to make in order to work from home, such as paying for electricity or equipment to work from home. These expenses cannot have been paid by your employer, you need to have paid for them yourself.
You can claim $0.80 for every hour that you worked from home, but you are not able to claim for anything else if using this method.
To claim this, you need to:
- keep a record of how many hours you worked from home
- work out your deduction amount
- write the deduction amount in your tax return in the ‘Other work-related expenses’ section
- write ‘COVID-19 hourly tax rate’ in your tax return.
If you are consulting with a registered tax agent like Leenane Templeton for your return, they may recommend this as your best course of action.
For more information please feel free to contact the LT team.