Hanna Tax & Business Solutions

27/06/2025

27/06/2025

Top 4 work-from-home questions answered

1. What is the Work-from-home (WFH) fixed rate for Tax Time 2025?
The fixed rate for the 2024–25 income year is 70 cents per hour worked from home.
As this rate may change each year, it’s important to check with the ATO or your accountant so you can claim the right amount for that year. Clients can use ATO provided home office expenses calculator.

2. Is there a minimum number of hours to qualify for a working from home (WFH) deduction?
No, there’s no minimum number of hours required to claim a WFH deduction. To claim these expenses, individuals must:
• be working from home to fulfil their employment duties, not just carrying out minimal tasks, like checking emails or taking calls
• incur additional running expenses because of working from home
• have records that show they incurred these expenses.

3. What types of records do taxpayers need to prove their ‘total hours worked from home’?
• To use using the fixed rate method, individuals need to have records that show all of their hours worked from home between 1 July 2024 and 30 June 2025 (including their start and finish time, each time they worked from home). This can be recorded through a diary, spreadsheet, rosters or timesheets.
• The record of hours must be made at the time they work from home, or as soon as possible afterwards. The ATO no longer accept an estimate or a representative record.
• If using the actual cost method, you need a record showing a continuous 4-week period that represents the usual pattern of working at home – for example, a diary.

4. Can an employee claim rent as part of the actual cost method if they work from home full time?
An employee working from home generally can’t claim for occupancy expenses such as rent, insurance or mortgage interest – except in limited circumstances where they have an area of their home set aside as a ‘place of business’. If individual are intending to claim occupancy expenses, there may be capital gains tax (CGT) implications for their home.

27/06/2025

Vic: Payroll tax threshold increased to $1 million

Starting 1 July 2025, the Victorian Government will raise the payroll tax-free threshold from $900,000 to $1 million. This follows a previous increase from $700,000 earlier in the financial year. As a result, approximately 6,000 businesses will be exempt from payroll tax entirely, with another 22,500 set to benefit from reduced tax obligations.

14/06/2025

Protect Your Business This Tax Season
Tax season is here, and it’s critical to protect your business from costly mistakes. Many accountants we review uncover significant errors that leave business owners exposed to ATO audits and financial strain. At Hanna Tax & Business Solutions, we’re dedicated to helping you eliminate cash flow problems and accounting errors, ensuring your business thrives without stress.
Here’s how we can help:
• Error Identification: We pinpoint hidden issues that could lead to expensive penalties.
• Financial Stability: Our expert services strengthen your business’s financial foundation.
• Stress-Free Compliance: Avoid costly mistakes and enjoy peace of mind.
Why Choose Us?
• 5-Star Reputation: Our clients rave about us with top Google reviews.
• Skilled Professionals: Our team delivers precise, dependable bookkeeping.
• Tailored Strategies: Customized solutions designed for your unique business needs.
• Proven Success: Optimize your finances and improve operational efficiency.
Don’t risk your business’s future. Take action now to secure your financial stability. Contact Hanna Tax & Business Solutions today to schedule your appointment!

Call now to connect with business.

14/06/2025

The Australian Taxation Office (ATO) has updated the income tax rates for Australian residents for the 2024–25 financial year (1 July 2024 to 30 June 2025), incorporating the Stage 3 tax cuts effective from 1 July 2024. These rates apply to Australian residents for tax purposes and do not include the 2% Medicare levy, which is generally applicable unless exemptions apply.

Key Changes for 2024–25
-Lower Tax Rates: The tax rate for income between $18,201 and $45,000 has decreased from 19% to 16%. The tax rate for income between $45,001 and $135,000 has decreased from 32.5% to 30%.

- Higher Thresholds: The threshold for the 37% tax rate has increased from $120,000 to $135,000, and the threshold for the 45% tax rate has increased from $180,000 to $190,000.

- Medicare Levy: A 2% Medicare levy applies to most residents, unless exempt (e.g., low-income earners with thresholds at $27,222 for singles, $45,907 for families, or $43,020 for seniors/pensioners). A Medicare levy surcharge of 1% to 1.5% may apply for high-income earners without adequate private health insurance.

- Low Income Tax Offset (LITO): Available for residents with taxable income up to $66,667, with a maximum offset of $700, which phases out as income increases. This effectively means no tax is payable on income up to $21,884 for eligible residents.

14/06/2025

Small Business Support – $20,000 instant asset write-off
The Australian government has extended the instant asset write-off limit for small businesses, increasing it from $1,000 to $20,000 for the 2024-25 income year, effective until 30 June 2025. This measure, announced in the 2024–25 Budget on 14 May 2024, is now law.
Eligible small businesses with an aggregated turnover of less than $10 million can:
• Fully deduct the cost of eligible depreciating assets costing less than $20,000, first used or installed ready for use between 1 July 2024 and 30 June 2025.
• Deduct costs incurred between 1 July 2024 and 30 June 2025 for the second element (cost addition) of an eligible depreciating asset, if an immediate deduction was claimed for the asset under simplified depreciation rules in a prior year, provided the cost is:
o The first amount of second element cost incurred after the income year in which the asset was written off; and
o Less than $20,000.
The $20,000 limit applies per asset, allowing small businesses to write off multiple assets. Assets valued at $20,000 or more can be placed in the small business simplified depreciation pool, depreciated at 15% in the first year and 30% in subsequent years. Additionally, pool balances under $20,000 at the end of the 2024-25 income year can be fully written off.

13/06/2025

Super as a tax deduction: Concessional Contributions

Concessional contributions are contributions made to your super fund before tax. These include:
• Employer contributions (Superannuation Guarantee)
• Salary sacrifice contributions
• Personal contributions for which you claim a tax deduction

How Catch-Up Concessional Contributions Work

If you haven't used up your concessional contributions cap in previous years, you can carry forward the unused amount for up to five years. This allows you to make larger contributions in a year when you have more financial flexibility.

Eligibility Criteria

To be eligible for catch-up concessional contributions:
1. Total Super Balance: Your total super balance must be less than $500,000 on 30 June of the previous financial year.
2. Unused Cap Amounts: You can only carry forward unused cap amounts from 1 July 2018 onwards, and these amounts can be carried forward for up to five years.

Example

Let's say the annual concessional contributions cap is $30,000. If you only contributed $10,000 in a given year, you could carry forward the unused $20,000. Over the next five years, you could potentially contribute up to $50,000 in one financial year, provided your total super balance is under $500,000.

Benefits

Flexibility: Allows you to make larger contributions when you have the financial capacity.
Tax Advantages: Concessional contributions are taxed at a lower rate compared to your income tax rate, which can result in significant tax savings

Based on the information from example 1, the personal CC cap for 2024/25 is $92,500. This consists of the annual CC cap of $30,000 and $62,500 of catch-up CCs.
The above assumes that you satisfy all eligibility criteria. Additional considerations need to be made as to whether making a concessional contribution is the most appropriate option.

12/06/2025

Removing deductions for ATO interest charges

Taxpayers can no longer claim an income tax deduction for ATO interest charges incurred on or after 1 July 2025.
The law change applies in relation to assessments for income years starting on or after 1 July 2025. This means that you can no longer deduct GIC and SIC incurred on or after 1 July 2025 in your income tax return for income years starting on or after 1 July 2025.

Examples of when ATO interest charges are incurred
When you claim a deduction for ATO interest depends on when GIC or SIC is incurred. This is when you become liable for the interest charge. Examples of this include (but are not limited to):

- GIC imposed on unpaid income tax liabilities is incurred on a daily basis.
- SIC imposed on an unpaid income tax shortfall is incurred in the year you are served a notice of amended assessment.