Tax return mistakes to avoid for businesses

Claiming work-from-home deductions

The COVID-19 pandemic prompted a temporary adjustment allowing for a flat rate of 80 cents per work-from-home hour. This provision ended on 30 June 2022.

Now, businesses can claim deductions using a revised fixed-rate method—67 cents per hour—provided they incur deductible expenses while genuinely conducting business from home. They must maintain pertinent records like timesheets for work hours and receipts for expenses.

If your work-from-home circumstances don’t align with these stipulations, the fixed-rate method won’t be viable. Instead, you’ll need to compute and allocate actual expenses. The actual expenses method can also be chosen if it better suits your situation.

Rental properties and vacation homes

The Australian Tax Office (ATO) is set to closely scrutinise rental properties and holiday homes this tax season.

It’s important to note that the ATO gleans information from sharing economy platforms, rental bond agencies, and regional revenue authorities, which aids in identifying under-reported income and inappropriate deduction claims.

Deductions for Superannuation contributions

For employers to qualify for a deduction for superannuation contributions, the fund must receive the contribution by or before 30 June.

Small business lodgment amnesty: A reminder

The ATO encourages eligible small business taxpayers to avail of the lodgment penalty amnesty program. This applies to tax obligations for income tax returns, business activity statements or FBT returns initially due between 1 December 2019 and 28 February 2022.

Superannuation obligations and penalties connected to the taxable payments reporting (TPAR) system are not part of this program.

Changes to minimum pension payments

Retirees receiving an account-based pension from their superannuation should note that the 50% reduction in the minimum pension drawdown rate, effective in previous years, will be discontinued from 1 July 2023.