New expenses tax break 'could lead to workers losing out'

By Mozo ·

Workers risk losing out on a massive sum if they accept the federal government’s new offer of a $500 standard tax deduction, an expert has warned.

Under the tax break, announced in last week’s Budget, the government has offered to give people the option of a $500 standard deduction which would replace deductions for all work-related expenses and take away the cost and hassle of managing tax affairs.

However, Adrian Raftery, chief executive of accountantsRus, told News Limited that the average deduction last year for work-related expenses was $1,952, meaning that workers who accept the standard deduction could be entitled to as much as four times that amount.

"The standard deduction is ridiculously low and really a back-handed tax grab,’’ he said.

Mr Raftery added that the level of allowable deductions is growing as more employees are required to pay for work-related expenses such as car, internet, computers and stationery costs.

The news may interest Aussies who wish to compare term deposits in search of the best returns for their monetary assets. Last week, the federal Budget announcement confirmed that Australian term deposit holders will benefit from a new 50 per cent tax cut on the first $1,000 of interest earned on savings.

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