Last-Gasp Tax Tips For This Financial Year

Last-Gasp Tax Tips For This Financial Year

The end of the fiscal year is approaching, as is the dreaded tax deadline. If you’re like most individuals, you’ll be scrambling to organize your documents and figure out how to pay your bills. But don’t panic, there are still some things you can do to reduce your tax payment. Check out these last-minute financial tips for the 2017 fiscal year!

Prya stopped by to see if there was anything she could do to reduce her tax bill for the current fiscal year. Yes, I informed her that it wasn’t too late for some things, but it might be too late for others.

“You should be able to make tax-deductible donations to appropriate organizations up to June 30,” I told her. If you wait until the last minute, it’s a good idea to call and make sure it’s not too late.

“You may be eligible to make tax-deductible payments to superannuation before June 30.” If you’re contributing to an external fund, though, it will have a deadline, so check with the fund immediately.

“The only requirement for donations to a self-managed fund is that the money is received by June 30.”

“Another change implemented this year is that you can claim the full cost of any depreciable items purchased for your business.” So, if you buy a car tomorrow, you can deduct the entire amount.

“Of course, when you sell that automobile, later on, you’ll have to make the full selling price as profit.” So, if you’re buying a big-ticket item, like a car or a computer system, consider whether it’s better to buy this year or next because the full-expensing option will still be available in the 2022 fiscal year.”

Prya was warming to the subject and wanted to know if there was anything else he could do to help.

Because she managed her business through a corporation, I informed her that there were a few things pertinent to corporations that she would find useful.

“The first is for small firms, of which you are one: the corporation tax rate is decreasing next year, so it may be advantageous for you to defer any additional income until next year if you report your income on a cash basis,” I explained.

“Send out fresh invoices after July 1 to reflect income in your 2022 statistics.” You might also spend more money before June 30 to minimize your 2021 income.

“The loss carryback provision is another useful provision for businesses.” You may be aware that you can carry losses forward, but there is a particular provision that allows you to carry your losses back and receive a refund of tax paid in previous years.

“You can only carry your loss back to the 2019 tax year, and the amount of tax that can be returned is restricted to the franking-account balance, so if you decide to use that option, you will require our assistance.”

“I should also mention that people were puzzled last year because they were not given their payment summary.” Because to Single Touch payroll, this will remain the case in 2021.

“However, as your tax agent, we may see your payment summaries and health-fund statements through the ATO website.” So don’t be bothered if you don’t receive them.”

“I’ll see you in the new fiscal year,” Prya said as she left to test drive a new car.

Last-Minute 2021 Fiscal Year-End Tax Planning

With another fiscal year coming to an end, it’s time to start planning for the 2021 End Of Financial Year. It’s easy to put off EOFY tax planning, especially when our attention is still on COVID, but you don’t want to miss out on the tax deduction opportunities that EOFY tax planning can provide.

There’s still time to take advantage of EOFY tax planning on the Gold Coast, and with accountants like Grow Advisory Group on your side, you can save a lot of money.

Write off Bad Debts

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Businesses can lower their tax burden by deducting bad debts and repaying GST. However, in order to claim the deduction, you must write down the bad debt amount before the end of the fiscal year.

You must be able to produce evidence that the bad debt is irrecoverable and that it was included in assessable income in order to claim a bad debt deduction. You must also retain evidence of your activities to reclaim the loan.

Maintain Current Records

Keeping your financial records up to date is important tax planning advice. All data, including invoices, expenses and deductions, assets, and bank statements, should be kept in your records.

If you haven’t already started, you won’t want to wait any longer. You have until the end of October to complete your accounting records.

Understand What Deductions You Can Claim

While Grow Advisory Group’s accountants are up to speed on 2021 End Of Financial Year tax deductions, they can only incorporate appropriate deductions provided you provide proof to justify such claims. As a result, you must be aware of what you can claim and retain records for all deductible expenses.

Make use of the Instant Asset Write-Off.

The instant asset write-off concession permits small enterprises with less than $500 million in annual revenue to take an immediate deduction for assets worth less than $150,000.

This concession is available for both new and old assets and can be applied to multiple assets.

Bring Expenses/Spending Forward

If you have expenses due in July or August, bringing them forward to the current fiscal year is a fantastic method for lowering your taxes this year. By prepaying charges, you will lower your taxable income and pay before June 30, 2021.

Similarly, if your company need new equipment or vehicles, buy them this month or next, before June 30, 2021, so you can deduct them this fiscal year.

Income Deferral

As previously stated, deferring big invoices until 1 July 2021 will reduce your taxable revenue in 2021. Furthermore, if you use accruals for accounting, you can postpone paying tax on that invoice until the end of the fiscal year in 2021.

With the end of the fiscal year approaching on June 30, 2021, there is little time to spare in preparing for the 2021 End Of Financial Year Tax. Now is the time to make plans to decrease your taxable income and take advantage of any tax breaks you may be eligible for.

While Grow Advisory Group’s highly skilled team of tax accountants will use their knowledge to lower your taxable income as much as possible, there are messages you can take to help enhance your tax return.

Write off bad debts, keep up to current records, know what deductions you may claim, use the quick asset write-off, push forward expenses and spending, and defer revenue where possible for the 2021 End Of Financial Year.

Tips for Getting the Best and Fastest Tax Return

In Australia, there are primarily two types of people: those who are eagerly awaiting the completion of their tax returns on July 1, and those who will put it off for as long as possible, fearing that this year will be the year when their tax return shifts from being a refund to becoming yet another debt in waiting.

2020 does little to simplify many people’s already complicated tax arrangements.

On the contrary, the effects of Covid-19-induced government roll-outs such as JobKeeper and JobSeeker are having a significant impact on returns and refunds, while others are simply looking to tax season as a way to get some extra cash in the door to weather the financial storm of a new Australian recession.

To assist you in navigating this minefield, we decided to enlist the assistance of Mark Chapman, Director of Tax Communications at global accounting company H&R Block, who knows a thing or two about squeezing every last penny out of your possible refund.

Claim What You’re Entitled To

Claim anything you spend as part of your job and have the documents to verify it. Among the most common deductions claimed by taxpayers are:

  • Working from home is expensive. Working from home expenses are the biggest deductible item this year, with almost 35% of all Australians working full-time from home in the last few months. To make claims easier, the ATO has implemented a temporary “shortcut technique” of calculating additional running expenses, which allows those working from home to claim a rate of 80 cents per work hour during the coronavirus outbreak. However, claiming your actual costs is likely to result in a far larger deduction. Again, a tax professional can assist you with your claim.
  • Costs associated with driving your own automobile to work. This excludes driving to and from work but includes visiting clients or suppliers and travelling from one work site to another.
  • Travel expenses for a job. If you are compelled to work away from home and incur fees for food and lodging, those expenses are deductible up to the amount spent. However, if your employer pays you a stipend to cover your travel expenses, such a stipend is taxable.
  • Tool and other equipment costs. Whether it’s the cost of tools for a tradesperson or the cost of a new computer, laptop, or mobile phone for an office worker, if you spend it, you can claim it, as long as it’s for work purposes (if it’s used partly for work and partly for personal use, you can only claim the work-related proportion). Items costing $300 or less are instantly deductible in full. Items that cost more than $300 are deducted over a number of years.
  • If you’re undertaking a work-related course, you may be able the claim the costs of course fees – along with textbooks, accommodation and meals if you study away from home. You can also claim the costs of computer consumables and home internet as well as depreciation cost of the computer used for studying. Bear in mind these course conditions:
    • the course must have a sufficient connection to your current employment
    • the course must improve specific skills or knowledge required in your current employment
    • the course must be likely to result in an increase in your income from your current employment

However, do not embellish deductions.

You can only claim what you have already spent. So, don’t overstate deductions to get a higher return, and only claim for costs you can verify you spent, such as an invoice, receipt, or bank statement. One in every four Australians makes mistakes and misses out on refunds when filing their own tax returns, with the most common errors being:

  • Forgetting to keep receipts or spending records (34%);
  • excluding a portion of earnings (27%)
  • Personal expenses (27%) are being claimed as deductions.
  • Again, your accountant will make certain that all of your deductions are legal and verifiable to the ATO.

Take Advantage of Working From Home

The effects of having to transfer your working space from home have touched a large number of Australians, however, this can have a significant influence on the bottom line of your tax return. If you work primarily from home this year, you can also deduct your cooling, heating, power, and internet costs, as well as your phone bill. Furthermore, any additional office equipment you acquired, from keyboards to computer displays, can be written off in full if it costs less than $300.

Keep Records

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If your total deduction claims exceed $300, you must provide documented documentation to support your claims. Your records must show the complete amount, not just the amount over $300.

In most cases, this will be an invoice or a receipt. A diary note will suffice for expenses of $10 or less, if the total of these expenses is $200 or less, or if you are unable to get written documentation – for example, toll or parking payments for which you cannot obtain a receipt.

If the sum claimed is $300 or less, you must be able to demonstrate how you computed your claims, but invoices are not required. There is a prevalent myth that you can immediately claim $300 in deductions without needing to prove them. That, unfortunately, is not the case. You can’t file a claim if you didn’t actually incur the expenses and can’t show how you calculated your deduction amount.

Don’t Forget the Fundamentals!

You must ensure that your basic information (such as your name, address, and date of birth) is valid and up to date. If you make a mistake, there will be a data mismatch and your tax refund will be delayed while the ATO attempts to correct the problem. Make sure to include your bank information on your return as well.

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