A common misunderstanding is that once your income hits a tax bracket, your whole income is taxed at that rate. Rather, once your income reaches a higher tax bracket, only the amount of income above that threshold is taxed at the higher rate.
We currently have the ‘actual’ cost method – where you need portion out the private expense versus the work related expense and this method requires significant records or there’s the ‘fixed’ rate method.
You can claim separately for:
• The decline in value for depreciating assets
• Electricity and gas – for heating and cooling
• Stationery and computer consumables
The Fixed Method does not require you to apportion expenses, between private and work. However, it restricts you from claiming each item separately.
The fixed rate method is easy to use, as it works out the number of hours you work and multiply by $.67cents per hour. This can often result in a fast result, but a lower tax deduction and return.
There are some key points that you must take in mind this time around:
• Low to middle income offset ended, with a structure Low income tax offset replacing it
• Super Contributions have increased with indexation to apply from 1 July 2024. The concessional cap becomes $30,000 and other caps have been adjusted accordingly
• Super Guarantee is also increased from 11% to 11.5% for wages and salaries paid 1 July, 2024.
It all sounds complicated. We are on top of things, so remember, the first step is to talk to us. A simple tax return may assist you with paying off your Credit card, putting it towards your Mortgage or placing it into your Offset account and reducing the amount of interest paid across the term of the loan.
For more information, contact us directly!
