How to Maximise Your Australian Tax Return 2024

Summary

This video provides tips for maximizing your tax return, focusing on methods for claiming home office and vehicle expenses, as well as lesser-known deductions. The tax agent explains two main approaches for home office deductions: the fixed rate method and the more complex actual cost method. He also highlights the importance of accurate record-keeping, including logging work hours and maintaining receipts. Additionally, the video discusses motor vehicle deductions, tax agent fees, and occupancy expenses, helping viewers choose the best options to maximize their refunds while staying compliant with tax regulations.

Takeaways

• 📊 Home office expenses are on the ATO hit list for 2024, with two main methods to choose from: fixed rate and actual cost method.
• 🖥️ The fixed rate method offers simplicity, with a rate of 67 cents per hour. It includes expenses for internet, mobile phone, electricity, gas, stationary, and consumables but excludes technology costs and office furniture over $300, which need to be depreciated.
• 📅 A log of actual work hours is required for the fixed rate method, and estimated hours are not accepted.
• 💡 The actual cost method allows claiming additional running costs, but calculating electricity and gas usage requires figuring out cost per unit and power consumption.
• 🏠 Occupancy expenses can be claimed if your home office is exclusive for work and the employer doesn’t provide an alternative. These include mortgage interest, rent, water rates, and insurance.
• 🚗 For motor vehicle expenses, you can use either the cents per kilometer method, capped at 5,000 km with a rate of 85 cents per km, or the logbook method, which claims a percentage of actual car expenses.
• 📝 Keep good records of all work-related expenses to maximize your tax return. This includes using bank statements and emails to track purchases if receipts are lost.
• 💼 Claim tax agent fees as part of your deductions if you paid for tax advice or filing services.
• ⚠️ Make sure to include all income, including from crypto, interest, and dividends, to avoid audit penalties. The ATO is targeting early lodgers who often make errors.
• 💸 Penalties for errors include up to 75% of the shortfall amount or additional fines depending on the level of negligence, with penalty units being $330 each as of 2024.

Q & A

What are the two methods to claim home office expenses?

The two methods to claim home office expenses are the fixed rate method and the actual cost method.

What does the fixed rate method include?

The fixed rate method includes home and mobile internet, mobile phone expenses, electricity and gas for heating, cooling, and lighting, and stationary and computer consumables.

What can be claimed in addition to the fixed rate method?

In addition to the fixed rate method, you can claim technology costs and office furniture. However, if these items are over $300, they must be depreciated over several years.

What is required when using the fixed rate method in terms of record-keeping?

When using the fixed rate method, you need to keep a log of your actual hours worked throughout the year, as estimations are not allowed.

How is electricity and gas calculated under the actual cost method?

Under the actual cost method, you must calculate the cost per unit of power used, the average power consumption per hour, and the total hours worked to calculate electricity and gas costs.

What are occupancy expenses, and who is eligible to claim them?

Occupancy expenses include mortgage interest, rent, water rates, land taxes, and house insurance premiums. You are eligible if you work from home because your employer doesn’t provide an alternate workspace, and the area is used exclusively or almost exclusively for work.

What is the main risk of claiming occupancy expenses if you own your home?

If you own your home and claim occupancy expenses, you might lose a portion of your main residence exemption from capital gains tax (CGT).

What are the two methods for claiming motor vehicle expenses?

The two methods for claiming motor vehicle expenses are the cents per kilometer method and the logbook method.

What is the rate for the cents per kilometer method in 2024, and what is the maximum claimable amount?

The rate for the cents per kilometer method in 2024 is 85 cents per kilometer, with a maximum claimable amount of $4,250 for 5,000 kilometers.

What records are needed for the logbook method?

For the logbook method, you need to keep a logbook for a 12-week period to determine the work-related percentage of your vehicle use, and then claim that percentage for all vehicle-related expenses, such as fuel, registration, insurance, repairs, and depreciation.