Lodging your tax return? Effective from 1st July 2022, these changes may affect you, find out how?
By Kaleem UlahLast Updated: July 4, 2022|5 min read
We all want maximum refunds in our tax returns, but the right way. The year 2022 marks nearly the end of pandemic but not completely. With rise in power bills, the cost of living is becoming more expensive. Specially! If you live in Adelaide, you must be well aware about the soaring rental prices and Lodging your tax returnLodging your tax return. And to top it off – the work from home deductions have changed.
Your work from expense – 80 cents method has been eliminated!
From June 30th the fixed rate method has been lowered to 52 cents per hour worked. However, this does not include the expenses such as mobile phone use, home office depreciation, or home internet. Alternatively, you will be using the actual cost method – What it means? Well you would have to keep written evidences such as receipts, amount you spent on assets (depreciating) for home and work-related use.
The Kalculators director Kaleem Ulah talks about how work from home expenses will be strictly monitored by the Australian Taxation Office (ATO). Moreover, the elimination of the 80 cents method will require tax payers to carefully think about how they claim their work from home related expenses.
Employees get paid $450 for their super regardless of what they earn, effective 1st July 2022.
With the elimination of $450 threshold, all employees over 18 will be receiving a superannuation guarantee even if you earn less than $450. Employers would have to ensure their accounting applications have been updated, to avoid making any errors. This simply means, it will no longer matter that employees are full time, part time, casual or a temporary resident. This would certainly be a huge relief for individuals who are working on casual basis and are not able to save much.
Home Loan Guarantee Scheme – 40, 000 places become available!
If you are an Australian looking to buy your first home, then you will be glad to know that 40,000 places have become available under the Federal budget scheme in 2022. Effective from 1st July, with a deposit of even 5 % you will now be able to buy your own home. Good news! Even if you are a single parent, you may be eligible with a deposit of even 2%.
Individuals of over age 60, can now make a “Downsize” contribution - Lodging your tax return
Currently individuals are required to be 65 or above to make use of downsizer contributions. However, this will now change, where individuals from age 60 and above will be eligible for making a downsize contribution in their superannuation of up to $300,000 (for single) and $600,000 (if you are a couple). This may also be used from the proceeds of selling your first home which you may have owned for 10 years or longer.
Superannuation guarantee increased to 10.5% from 10%.
Well the superannuation will now continue to increase every year by 0.5 per cent until it reaches 12 % by 2025. For employees who are paid with their normal wage plus super. This would mean that there will be an increase of 0.5% in their superannuation funds. However, if an employee is paid on total remuneration basis, then their home pay might be reduced by 0.5 %. This in fact would totally be dependent on the agreement between you and your employee
SMEs may have more cash to utilise with the 2 per cent uplift method.
If you are a business or hold an investment income, then you may very know about the PAYG instalments. With the regular prepayments made during the given financial year, the actual amount is reconciled, during the tax return lodgements. Normally, PAYG instalment and GST amounts are adjusted or uplifted accordingly. For the given FY 2022- 2023, the government has set an uplift factor of 2 per cent rather than 10 per cent. Applicable to small to medium businesses, to use the relevant instalment methods:
- For GST instalments – up to $10 million annual aggregated turnover.
- For PAYG instalments – up to $50 million annual aggregated turnover.
This simply means small businesses using the 2 per cent uplift method will have more cash for the financial year to utilise. However, please note the amount that needs to be contributed during the year may change but not the actual amount of tax owed.
Not sure, how these changes may affect you? Or looking to lodge your 2022 tax return?
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Kaleem Ulah
Kaleem is CEO & Author at "The Kalculators". With more than 10 years of experience in financial services, he built Kalculators to transform your financial challenges into strategic triumphs!
