Tax Season: Get your house in order

- By Darren Smith

The start of the new financial year is a clear line in the sand for many to review, reset and restart. We review where we are and what we have achieved for the last 12 months. We then identify the areas we need to adjust and then begin following through to make those changes.

There are 6 general areas that will help build financial resilience. Importantly if we can anchor to things that are important to us, we are more likely to stick with them.

• Understand and track your spending

• Identify 2 or 3 spending areas to stop, reduce or defer

• Review all loans and the interest being paid

• Put away a regular amount for the rainy-day fund

• Create a savings plan

• Consider small steps to assist those less fortunate

Of course, for many Australians this is also a time of the year that we need to meet our tax obligations.

In amongst the uncertainties that have come with our individual and collective COVID experience, one thing that has remained constant is the love-hate relationship with paying tax and getting organised for the annual appointment with a professional tax agent.

For those expecting a return there will be a scramble to get everything together quickly. Sometimes plans have already been made for the potential refund! For those that self-lodge online there is a lot more to consider.

With so much information now being pre-filled into your tax return, it’s best to wait until all the data is loaded before lodging. This is usually by the end of July but can take a little longer in some cases.

Take the time to understand what tax deductions and offsets you may be eligible for. With many people being impacted by COVID and working from home there are more areas to consider around possible deductions this year.

Keep in mind, as always with tax, it is important to be prepared and keep good records. The same applies with those who received job keeper/seeker payments, you would have already received a myGov message to remind you to include these payments in your return.

Check that your income statement from your employer on myGov says ‘tax ready’ and your private health insurance, dividend and interest information is available before visiting your tax agent.

JobKeeper and JobSeeker payments will be included by the ATO in your tax return by the end of July if you have received them.

The ATO also have some useful fact sheets for many occupations with some guidance.

Here are some broad areas to consider when getting ready this year:

• Consider deductions that you may be able to apply

  • Work related deductions

  • Self-education expenses

  • Work from home and home office expenses (there are some extra claim options due to COVID-19)

  • Motor vehicle or travel for work

  • Donations

  • Superannuation contributions

• Use a registered tax agent

• Beware of scams

Being tax ready is about getting organised and understanding what you may be eligible for. Don’t stress as you don’t need to do this yourself and can engage a registered tax agent to assist you through the process.

COVID-19: Tax deductions for working from home

The ATO has previously announced options in in relation to calculating deductible home running expenses for people working from home due to COVID-19.  The ATO have also made it clear that this is an area of focus in reviewing deductions made.

Other target areas in addition to work related expenses include rental properties and capital gains on cryptocurrency, property, and shares.

This is a great time of the year to review, reset and restart and build your financial resilience. Don’t let the stress of tax time overtake you. Our team of professionals are here to help. Call our team today via 07 3721 4400 to book your appointment.