*Lauren Rouse has declared that a new financial year has arrived and brings with it the promise of generous taxation returns.
A new financial year is here, and with it comes the promise of a juicy tax return.
Unfortunately, for a lot of people, their tax returns may be missing some of the juice this year as regulation changes trim down the amount of money taxpayers are able to receive back.
Here’s why your 2023 tax return might be smaller than in previous years.
Why your tax return might be less this year
Despite our best efforts to prolong weather, fall, winter will be here before you know it.
An offset that has bolstered the tax returns of many Australians for years is coming to an end this year.
The LMITO previously delivered a hefty tax break for those earning up to $126,000, however, this expired as of 30 June 2022, meaning tax returns from the 2022-23 financial year will be missing this cash boost.
H&R Block’s tax expert Mark Chapman told Lifehacker Australia that many taxpayers likely won’t realise that their return is set to shrink until they receive it this year.
“The LMITO was around for several years and provided a tax offset if you were a low or middle-income taxpayer,” Chapman said.
The amount you received varied depending on your income, with the maximum offset giving taxpayers $1,500 in their refund. With this offset now non-existent, many Australian taxpayers will suddenly receive a lot less in their 2023 return.
Changing working from home claims
With pandemic conditions over and many returning to working from the office, the ATO is changing the way WFH claims work – and not in a good way.
“Of course, they don’t phrase it that way – instead they talk about simplifying the system and making it easier for taxpayers to claim.
“But the effect is clear – many taxpayers will struggle to make a claim this year and of those that do, the majority will see far smaller claims,” Chapman said.
So why is this happening?
The ATO has abolished the 80 cent per hour shortcut rate along with the 52 cents per hour fixed rate that was previously in place.
“Instead, they have introduced (from 1 July 2022) a new fixed rate of 67 cents per hour, with enhanced record-keeping requirements and a changed mix of items which are included in the rate,” Chapman explained.
All of this may also mean you will find that your tax return in 2023 is low compared to other years. For a full guide on how all that works, you can check out our work-from-home tax guide.
Both of these tax return changes are a tough blow for Aussie taxpayers, particularly while we’re in the grips of a cost of living crisis.
Can you amend your tax return?
If you receive your notice of assessment and notice the amount looks lower than you were expecting you do still have time to make some changes.
As per Chapman, you can amend a tax return for up to two years after you receive your notice. This gives you time to add any claims you may have forgotten, which will help you squeeze every bit of money out of your return as possible.
If you need help sorting out your tax return we’ve put together some top tips to guide you through it.
*Lauren Rouse is a writer for Lifehacker Australia. She specialises in a range of topics including entertainment, technology, gaming, and life in general and has an unhealthy obsession with pop culture which has seen her writing published on The Direct and Game Rant and she frequently covers entertainment news, reviews and interviews for Lifehacker, Gizmodo and Kotaku Australia.
Lauren was nominated for Best New Journalist (2022) at the IT Journalism Awards and she also holds a Master’s degree in screenwriting.
This article first appeared in Lifehacker
