DFK Gooding Partners

July 15, 2024

We’re into the new 2024-25 financial year, which means tax returns are on the radar. The ATO is encouraging small business owners to prepare for a successful 2024 tax return lodgment by considering the below tips. In addition, the ATO has published a handy tax-time toolkit for small business. You can download the toolkit here.

Claiming working from home expenses

Claiming work-related expenses is an area where taxpayers frequently make mistakes, and the ATO has flagged it a primary area of focus for tax time 2024.

Copying and pasting your working from home claim from last year may be tempting, but this will likely mean we will be contacting you for a ‘please explain’. Your deductions will be disallowed if you’re not eligible or you don’t keep the right records.

ATO Assistant Commissioner Rob Thomson

There are two methods for calculating work from home expenses: the actual cost method and the fixed rate method. Both methods require keeping detailed records and following the ATO’s three golden rules: the money must have been spent by the taxpayer without reimbursement, the expense must be directly related to earning their income, and the taxpayer must have a record to prove the expense. The two methods can’t be used in combination – you need to pick one or the other each year – so it’s important to consider which method will best suit your individual circumstances.

To be eligible to claim working from home expenses by either method, when working from home you must be fulfilling employment duties (not just minimal tasks like taking calls or checking emails); incur additional running expenses as a result of working from home (eg increased electricity or gas costs for heating/cooling or lighting); and keep detailed records showing how these expenses were incurred.

Purchase and keep records of tax-deductible items

The end of the financial year on 30 June represents the last chance to purchase any tax deductible items that the business intends to claim for 2023–2024. Ensure that any tax-deductible items are documented both for cost and usage, including apportionment for work and private use where relevant.

Check your small business concessions

Small businesses may be able to access a range of concessions based on their aggregated turnover – this applies to sole traders, partnerships, companies and trusts – including CGT concessions, the small business income tax offset or the small business restructure roll-over

Finalise STP records

The ATO reminds small businesses with employees that the 2023–2024 STP information must be finalised by 14 July. This important end-of-year obligation ensures that employees have the correct information required to lodge their income tax return. STP information for all employees paid in the financial year, even terminated employees, must be finalised.

Check your PAYG withholding and instalments

From 1 July, individual rates and thresholds will change and will impact PAYG withholding for the 2025 financial year. Check that the correct PAYG withholding tax tables are being used and that software has updated to the new withholding rates from 1 July. If PAYG instalments could result in paying too little or too much tax, instalments may be varied.

Review your record keeping

Looking toward the next financial year, small businesses should review their record-keeping from the past year and see if anything needs to be done differently in the future.

Enquire about tranisitioning your business to Xero

Complete the quick contact form below with your details and one of our team will be in touch to discuss your requirements. Alternatively, you can call us (08) 9327 1777 or email info@dfkgpca.com.au

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