Individual tax changes for year end

As tax time is here, this message runs through some important tax changes for 30 June 2022. Some of the following changes are already in place and ready for you to take advantage of, and some will come into effect from 1 July 2022.

Either way, we believe it is essential for you to review the points below for opportunities available to you this tax season.

If you need to know more about the items discussed below, please contact our office for more information.

COVID-19 tests can be tax deductible

An allowable deduction is available for expenditure relating to a COVID-19 test used for work purposes. To claim the deduction, you must have paid for the test yourself and not have been reimbursed by your employer.

The following reasons for testing are considered to be for a deductible purpose:

• you were required to test to gain access to a worksite
• your employer required you to test before attending work, or
• you were previously COVID-19 positive and you were required to test to show a negative result before returning to work.
• 
  

You will need to apportion your costs for COVID-19 tests where some of the packet was used for work purposes and some was not.

Deductions for working from home

The COVID-19 deduction for working from home is not new for the 2021–22 income year. However, it is important to know the difference between what you can and cannot claim. Generally, you will be able to claim a notional deduction of 80 cents per hour for running costs while working from home.

Home office for personal convenience

Prior to the COVID-19 deduction of 80 cents per hour for working from home, a similar deduction was available for 52 cents per hour. The additional information for the 2021–22 income year is to include telephone and internet expenses while working from home.

It may be prudent to complete calculations to compare notional deductions with actual deductions. However, even if you have a dedicated area for your home office, it may not qualify as a place of business or income earning base. The ability to claim a deduction for home office expenses depends on whether your home office is:

• the sole base for your income earning activity, or
• used as a matter of personal convenience.

If your home office is a matter of personal convenience, only running expenses are available for deduction. Please speak to us if you are looking to make a large claim for your home office this year.

Other tax changes for consideration



• The small business income tax offset for individuals has increased from 13% to 16% for the 2021–22 income year.
• There is now a capital gains tax exemption for individuals who enter into a formal granny flat arrangement at their main residence.
• Individuals who released superannuation benefits early during COVID-19 are able to recontribute that amount without affecting their concessional contribution caps.