The following tax planning measures should be considered in respect to your own individual circumstances. For specific guidance please refer to the ATO website or consult your Tailored Accounts accountants.
End-Of-Financial-Year Tax preparation often seems a bit daunting for many people. The COVID-19 outbreak this year has generated a range of impacts on the community and individual well-being. Tailored Accounts will help you overcome the burden of individual tax return complexities. The following tips provide a comprehensive list of important items for your coming tax return.
- Salary Sacrifice Arrangements
If employed, you may wish to review your remuneration arrangements with your employer and forego future gross salary in return for receiving exempt or concessionally taxed fringe benefits and/or making additional superannuation contributions under a valid salary sacrifice arrangement.
Please review your contributions including Superannuation Guarantee (SG) and Salary Sacrifice to assess whether you have over/under contributed. It is now a good time to adjust your contributions.
- Additional Superannuation Contributions
Voluntary superannuation contributions would help grow your super balance quicker and reduce your personal tax liabilities.
- Work-Related Deductions
For employees who are working from home during the period 1 March to 30 June 2020, the ATO is allowing a temporary simplified method of calculating deductions for additional running expenses. There are 3 alternatives including:
- 80 cents per hour for all additional running expenses incurred after 1 March 2020 until 30 June 2020; or
- 52 cents per work hour for heating, cooling, lighting, cleaning and the decline in value of office furniture, plus the work-related portion of phone and internet expenses, computer consumables, stationery and the decline in value of a computer, laptop or similar device; or
- The actual work-related portion of all running expenses, which will need to be calculated on a reasonable basis.
- First Home Super Saver (FHSS) Scheme
The FHSS scheme essentially allows an individual to make additional voluntary salary sacrificed superannuation contributions or after-tax contributions to a complying superannuation fund from 1 July 2017 up to a maximum amount of up to $15,000 per year (and $30,000 in total) which can be withdrawn to help finance a first home deposit from 1 July 2018. In addition, where the buyer’s partner also has never owned real property, the couple can effectively withdraw an amount of up to $60,000 to jointly fund a home deposit.
- Early Access To Your Superannuation
You may be able to withdraw up to $10,000 from your superannuation balance in Financial Year 2019/20 and a further $10,000 in 2020/21. You do not need to declare those amounts in your tax return, in other words, they are tax-free. In order to be eligible, you must pass one of the following tests:
- You are unemployed; or
- You are eligible to receive a JobSeeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance; or
- On or after 1 January 2020:
- You were made redundant; or
- Your working hours were reduced by 20 per cent or more; or
- If you are a sole trader and your business you suspended or there was a reduction in your turnover of 20 per cent or more.
If you are unsure of your current tax status or need assistance and advice for your EOFY preparation, please contact Tailored Accounts for a 20-minute of free consultation. Alternatively, you can access the Tailored Accounts - Sharing Is Caring Page for a free download of an individual cashflow assessment plan.