To claim, or not to claim?
Information produced by the Australian Taxation Office
This article includes information for Small Business Owners and Performing Artists
It’s almost show time!
Tax time is right around the corner. Not sure what deductions to claim? Well, good news, the Australian Taxation Office (ATO) have shared some helpful tips and resources to give you a hand!
Tips to get your deductions right
If you’re planning on claiming work-related expenses this year, check out the Australian Taxation Office’s (ATO) range of tailored occupation guides. They’re a great resource that will help you work out what you can and can’t claim at tax time. Visit www.ato.gov.au/occupations
And remember there are 3 golden rules when it comes to claiming a deduction for a work-related expense:
You must have spent the money yourself and weren’t reimbursed
It must directly relate to earning your income
And you must have a record (usually a receipt) to prove it.
The ATO are running webinars to help you brush up on your record keeping skills:
Claiming small business tax deductions: This 60-minute session will help you know which deductions you can claim and when you can claim them. The session also covers what records you need to keep.
Using your business money and assets: This 60-minute session will go through the options -and their requirements - so you can be sure you’re paying yourself correctly.
Worked from home?
If you’ve worked from home this financial year, there are two ways to calculate your deduction this tax time – the revised fixed rate method, or the actual cost method. From 1 July 2022, the revised fixed rate method has increased from 52 cents to 67 cents per hour worked from home, and no longer requires you to have a dedicated home office space. The expenses covered in the rate, and the records you’ll need to keep, have changed too.
Small businesses and studios
Set your small business up for success
With tax time around the corner, it’s a good time to start thinking about how to implement good business practices that you can take with you into the new financial year.
Businesses that operate well and meet their obligations usually have the same things in common – good cash flow management, good record keeping and the right digital tools to help run their business.
For more information and tips, the ATO can help.
Getting your STP Phase 2 reporting right
The ATO has pulled together some tips to help you keep on top of your Single Touch Payroll (STP) Phase 2 reporting:
Pay codes: Make sure to set up your pay codes correctly, and that payments (including allowances, paid leave and overtime) are itemised separately.
Continuity of year-to-date (YTD) reporting: If you’ve transitioned to STP Phase 2 reporting part-way through the financial year, check that you’ve maintained the YTD amounts you’d already reported through STP Phase 1. This applies unless you used the replacing payroll IDs method for transitioning to STP Phase 2.
Employee details: Double-check your employees’ details are accurate and complete. Information such as an employee’s name, tax file number and date of birth helps us to match your STP records with your employees.
Employment basis: Remember to report your employees’ accurate employment basis (such as full time, part time, or casual) each time you run your payroll.
The ATO has an overview of common STP Phase 2 reporting questions and mistakes, featuring short, topic-based videos.
Sharing Economy Reporting Regime commences July 1 – what you need to know
The Sharing Economy Reporting Regime (SERR) requires certain Electronic Distribution Platforms (EDPs) to collect and report information on transactions that sellers make through the platform to the ATO from 1 July 2023. If you earn income from sharing economy activities, make sure you understand your obligation to report this income as part of your tax return or activity statements. The SERR helps the ATO increase community confidence in the integrity of our tax system.
Offsetting credits and refunds from “debts on hold”
The ATO is writing to small businesses with debts on hold greater than $10 that may be affected by offsetting.
When a debt is on hold, the ATO does not try to collect it. However any credits or refunds small businesses become entitled to are used to pay off the debt. This is called offsetting and it’s required by law.
After offsetting, any debt balance still payable will remain on hold. Small businesses don't need to do anything. The ATO will continue to offset any credits or refunds until the debt on hold is paid in full.
More information, including how to view debts on hold and offset transactions in ATO online services, can be found at ato.gov.au/debtsonhold.
Seeking compensation from the ATO
Did you know you can apply for compensation from the ATO if their actions cause you a financial loss? You can apply yourself or through a third party, such as a lawyer or registered tax professional. If you are a small business operator, the Australian Small Business and Family Enterprise Ombudsman can also provide assistance. Find out more on the ATO website at ato.gov.au/compensation
Wait for pre-fill before lodging
Encourage your employees to wait for their income statement to be marked ‘tax ready’ and their information to be pre-filled before they lodge their income tax return. Those employees who wait for pre-fill generally won’t have their return help up in the system and need to amend their return when the information arrives.
You can assist by completing your end-of-financial-year Single Touch Payroll (STP) finalisations as soon as possible.
Visit the ATO website to find out more
Superannuation
Late and unpaid super guarantee contributions
If you didn’t pay the correct amount of super guarantee contributions to all your eligible employees’ nominated super fund, or you have paid after the 28 April due date, you’ll have to:
Lodge a super guarantee charge (SGC) statement.
Pay the SGC to us by 28 May.
If you lodge the SGC statement after the due date, you may face an additional penalty of up to 200% of the SGC.
The SGC is more than the super you would have otherwise paid to your employee's super fund and is not tax deductible.
Super health check
This tax time, the ATO is introducing a super health check – 5 simple checks to help employees manage their super. After completing the super health check, employees may have questions about their super guarantee (SG) contributions and the rate of the contributions. Head to the ATO website to find out more.
Performing Artists
‘To claim, or not to claim?’
From agent fees, to travel expenses – the ATO’s tailored occupation guide for Performing artists helps you understand what you can and can’t claim in your tax return. It also covers the income and allowances you’ll need to declare, and the records you need to keep.
Can I claim grooming expenses?
When it comes to grooming expenses, you can’t claim the cost of hairdressing, cosmetics, hair and skin care products not relating to your role or costume.
However, you may be able to claim the cost of:
• a particular hairstyle if it’s required for a role.
• hairdressing to maintain a required hair length or style as part of a costume.
• stage makeup, including the cost of cleansing materials for removing stage makeup.
Keeping on top of your records
Keeping the right records is essential. Use the myDeductions tool in the ATO app for a fast and easy way to store your receipts and to keep on track of your records! The ATO app is also one of the best ways to keep track of the progress and outcome of your tax return after you’ve lodged.
Your tax assessment
The ATO is reminding people that the low and middle income tax offset has ended and you may get a lower refund this year, or you may get a bill. A list of this and other reasons that may affect your tax refund are available on the ATO website at ato.gov.au/mytaxresult
Want to learn more? Visit ato.gov.au/performingartist