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June 2025 Newsletter

Please click on the following link to view this month's newsletter for June 2025. We would like to highlight the following articles:-

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Working out your WFH expenses this tax time

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If you are working from home to fulfil your employment duties and incur additional running costs, you may be eligible to claim a tax deduction for these expenses. Common deductible expenses include electricity for heating and cooling, internet and data usage, phone bills, and stationery or office supplies.

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There are two methods available for calculating your deduction:

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  • Fixed Rate Method:
    For the 2024–2025 income year, the fixed rate is 70 cents per hour worked from home. This rate covers utilities, internet, phone usage, and stationery. To use this method, you must maintain a record of hours worked (either over a four-week representative period or for the full year) and keep evidence of incurred expenses. If you use this method, you cannot claim separate deductions for items already covered by the rate.

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  • Actual Cost Method:
    Requires detailed records of each expense and the work-related portion. You must also track your work-from-home hours and provide receipts or bills to substantiate your claims.

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What You Can and Cannot Claim:

  • Non-deductible items include household supplies like tea, coffee, or any equipment provided or reimbursed by your employer (e.g. laptops, phones).

  • You may claim separate deductions for work-related assets such as computers, desks, chairs, and repairs or maintenance.

    • For items over $300 used for both work and personal purposes, only the work-related proportion is deductible and must be depreciated over the asset’s effective life.

    • For items $300 or less, you can claim an immediate deduction in the year of purchase.

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All deductions must be directly related to earning income. The ATO has highlighted examples of rejected claims, including luxury fashion items and home appliances, which were not directly connected to the taxpayer’s work duties.

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​Instant asset write-off extended to 30 June 2025​

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As part of the 2024–2025 Federal Budget, the $20,000 instant asset write-off has been extended for an additional 12 months through to 30 June 2025, providing continued support for small businesses.

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Eligibility Criteria:
To access the instant asset write-off, your business must:

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  • Have an aggregated turnover of less than $10 million;

  • Use the simplified depreciation rules; and

  • Acquire and first use (or install ready for use) each eligible asset between 1 July 2024 and 30 June 2025.

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The $20,000 threshold applies per asset, allowing multiple claims for different assets valued under this limit. Assets above $20,000 must be added to the simplified depreciation pool and depreciated at:

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  • 15% in the first year; and

  • 30% each year thereafter.

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Exclusions:
Certain assets are excluded from the instant asset write-off, including:

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  • Leased assets (leased for more than 50% of the time);

  • Horticultural plants and grapevines;

  • Software in a development pool;

  • Assets used in R&D activities;

  • Capital works (e.g. buildings and structural improvements).

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The extension of the instant asset write-off provides small businesses with an opportunity to invest in eligible assets while benefiting from immediate tax deductions. For tailored advice on your eligibility and record-keeping requirements, please contact our office.

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Please do not hesitate to contact us if you have any queries in relation to your tax and accounting matters.

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