Tax News and FAQs
$500 standard work related deduction
2 March 2011The Government today released a discussion paper providing individuals with a standard $500 income tax deduction for work related expenses and the cost of managing tax affairs from 1 July 2012. The standard deduction does not require substantiation.
The standard deduction is proposed to increase to $1,000 from 1 July 2013.
The standard deduction will be available to all taxpayers, regardless of whether they have actually incurred any WRE or costs of managing tax affairs. This includes non resident taxpayers and minors (children under 18 years of age) subject to the unearned income provisions of Division 6AA of the Income Tax Assessment Act 1936.
The proposal states that the standard deduction would be automatically provided to a taxpayer who does not fill out the labels on the tax return for WRE and costs of managing tax affairs. Where a taxpayer did fill out the labels for WRE and costs of managing tax affairs but the total claim did not exceed the standard deduction the taxpayer would automatically be given the standard deduction amount as a deduction instead of the total itemised claim. Where the itemised claim for WRE and costs of managing tax affairs exceeded the standard deduction the taxpayer would be given a deduction for the total itemised claim.
Those who have claims above the standard will still need to lodge their tax return and claim their deductions under existing rules.
The proposal was previously announced in the 2010/2011 Federal Budget and is contingent on the passage of legislation introducing the mineral resource rent tax.
Submissions close 8 April 2011.
More information
Media release - Removing the hassle of a shoebox full of receipts Discussion paper - Making tax time simpler: standard deduction for the cost of work-related expenses and the cost of managing tax affairs
