Making tax time simpler

Simpler treatment of work‑related expenses

The Government will ease the cost of living for ordinary Australians, and make our personal tax system simpler, to minimise the time and resources people spend on their tax returns.

Under the current personal tax system, many people find it difficult to work out how much tax they need to pay or how much they should receive as a refund.

Calculating work related expenses is the main tax burden for many Australians.

As a result, more Australians use tax agents than almost anywhere else in the world.

From 2012‑13 the Government will provide taxpayers with the choice of a $500 standard deduction to replace deductions for their work‑related expenses and cost of managing tax affairs. This will increase to $1,000 from 2013‑14.

This will enable taxpayers to spend less time and effort preparing their tax return and more time with their family.

When fully implemented, 6.4 million Australians will find it easier to choose just the standard deduction and will see their tax drop by an average of $192.

Taxpayers with higher expenses or more complex tax affairs can continue to claim their expenses and will not be worse off.

The Government will continue to improve pre‑filling so that more Australians can have their tax return filled out for them.