2022 Budget - tax related measures
Personal taxation
Low income tax offset - LMITO increased by $420 for 2021-22
The low and middle income tax offset will be increased by $420 for the 2021/22 financial year so that eligible individuals will receive a maximum LMITO benefit of up to $1,500 when they lodge their 2021-22 income tax return.
Important to note is that the LMITO has not been extended into the 2022-23 financial year, this means that the $1,080 extra refund or less tax payable, we have gotten used to, will no longer be available.
COVID-19 test expenses to be tax deductible
The budget papers confirm that the cost of taking a COVID-19 test to attend a place of work are tax deductible for individuals from 1 July 2021. So if your employer requires you to show a negative RAT or PCR test to attend work, you can claim costs associated.
$250 cost of living payment
Eligible recipients will receive a one of payment of $250 during April 2022, this includes eligible pensioners, welfare recipients, veterans and concession card holders.
Business taxation
External training courses
An eligible business will be able to deduct an additional 20% of expenditure incurred on external training courses provided to its employees. The training course must be provided to employees in Australia or online, and delivered by entities registered in Australia. Some exclusions apply such as in-house or on-the-job training.
The boost will apply to eligible expenditure incurred from 29 March 2022 to 30 June 2024. For expenses incurred up to 30 June 2022, the 20% boost can be claimed in the following financial year. For expenses incurred in the 2023 or 2024 financial years, the boost can be claimed in the income year in which the expense occurred.
For example, if you spent $10,000 on eligible training expenses prior to 30 June 2022, then you can claim an additional $2,000 in the 2023 financial year business tax return.
Digital adoption
An eligible business will be able to deduct an additional 20% of the cost incurred on business expenses and depreciating assets that support its digital adoption, such as portable payment devices, cyber security systems or subscriptions to cloud based services.
An annual cap will apply in each qualifying income year so that expenditure up to $100,000 will be eligible for the boost. The boost will apply to expenditure from 29 March 2022 to 30 June 2023.
For expenses incurred up to 30 June 2022, the 20% boost can be claimed in the following financial year. For expenses incurred in the 2023 financial year, the boost can be claimed in the income year in which the expense occurred.
For example, if you spent $1,000 on eligible digital expenses prior to 30 June 2022, then you can claim an additional $200 in the 2023 financial year business tax return.
COVID-19 response package
Making COVID-19 business grants received in the 2020-21 and 2021-22 financial years non-assessable non-exempt income. For example, if your business received JobSaver payments or NSW Government small business grants, you will not be taxed on those receipts.
No advice disclaimer:
Taxpayers should not act solely on the basis of the material contained in this post and any of our website/social media pages. Items herein are general comments only and do not constitute or convey advice per se. Also changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before acting in any of the areas. Posts are published as a helpful guide to taxpayers and for their private information.
