It’s already October, and one thing that people are doing faster right now is to file the correct tax return for their income and gain benefits from the ATO for their best. Every person who is resident in Australia for tax purposes is eligible to pay the taxes and to file the income tax return for it, and hence they are allowed to do it by the 31st of October every year.
Paying out taxes can be tough for people as they see a large part of their income going away from them, and the government is the one that is taking the income away. But only a few of you are aware that you can save a lot of your income if you make the right selection and take correct deductions from it!
The deductions
Deductions are the most important part of the income tax calculation, and it is the tool, or you can say the benefit in the hands of the payee through which they could make their taxable income decrease and hence can save it from getting into higher tax slabs.
The deductions are the expenses you have made to earn all your income, and hence you are not being paid for them additionally or when they are not reimbursed.
Work From Home Deduction
COVID 19 has taught us many things, and everyone needs to adopt the changes they face in society due to it. One of the most crucial changes that we are observing is the culture of working from home.
The work from the home category is the need of the hour, and hence people are doing it daily while facing a lot of circumstances. However, the best part is that you will get paid for each step you take and the expenses you incur while performing this activity. Through the deduction of WFH, it will help you claim all your expenses in the best possible way, and hence you could save a lot from your income and make a lesser income to enter the higher tax slabs.
Calculation for deduction
The work from the home deduction is not that tough a call for anybody, and hence whoever is working from home can claim it without any type of doubt. There are two ways to calculate and adjust it:-
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Calculating at 52 cents per hour
The formula is the simple one, and there are no hard and fast rules to claim it on a daily basis. In this way, you can calculate the hours for which you are working at your home and hence can multiply it by 52 cents to get the deduction amount ready. It is the most basic way of claiming the deduction and hence is easier for you as you need to maintain the time records in the diary.
The best part is that you will be able to claim other expenses separately like tools, internet, transportation, repairs, and all.
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Calculating at 80 cents per hour
Well, it is a new way of calculating the work from home deduction but is only applicable for the financial years 2021 and 2022. In this, you can calculate the hours in which you are working, and straightaway multiplies it by 80 cents and hence in this way you will get a lump sum payment for all your expenses, and hence no other expenses are to be deductible.
Hence, if you are looking forward to making your taxable income decrease by $1000, you can surely go for claiming the best deduction, which decreases your salary in the best possible way!