Pre-gaming for tax time
Sound the alarm because TAX TIME is just around the corner, and while many may be slowly reclining into winter hibernation, we accountants are just firing up.
One of the secrets to an easy breezy EOFY is being prepared so we’ve armed you with our comprehensive checklist of what you need to do before your 21/22 personal or business tax meeting with one of us.
Tally up your taxable income
Your taxable income includes all of the income streams that you have to pay tax on. These include:
- Salary and wages from your employer
- Interest from bank accounts
- Dividends and other income from investments. These definitely include cryptocurrency!
- Any bonuses or commissions
- Rental income
Work our your tax deductions
We love a deduction and encourage you to think about these before your tax meeting.
- Add up your phone and internet bills and work out what percentage of these you used for work purposes.
- Did you have to buy rat tests for work? These are deductible!
- If you work from home there are lots of potential deductions including electricity expenses for heating or cooling and lighting, even toilet paper.
- If you’ve undertaken study or a course that relates to your current employment activities and you’ve paid for it yourself, this is deductible.
- You can claim transport and travel expenses if you have needed to travel while performing your work duties. This includes ubers and taxis, flights, public transport and driving your car, but more on that next!
Update your log book
Everyone has the best intentions when they start their logbook for the financial year, but not everyone perfectly maintains them. Now is the time to ensure your logbook is accurate and your kilometres are recorded. Remember that travel to and from work is not a deduction (unless you’re carrying tools), but travel in a personal vehicle for work can be.
If you haven’t kept a logbook, you can use the cents per kilometre method, where a single rate is used to claim up to 5000 kilometres.
Get your records in order
Keeping your business’s financial records organised throughout the year is important, but it’s crucial at tax time. If you’re *one of us* and use Xero then this shouldn’t be a problem because everything should be in order. However if you need to tidy up a few things (and get on top of reconciling those transactions!) Now is the time to do so.
Work out your business deductions
Think business travel, wages, vehicles, business related softwares, office supplies and furniture, tools, tech and tax agent fees. Just remember to keep your business expenses and personal expenses separate.
Concessions, offsets and rebates
Eligible businesses can access a range of concessions and rebates to help reduce the amount of tax they need to pay. We’re across these for our clients, but if you want to find out more for yourself take a look on the ATO website. These include concessions such as temporary full expensing (or the instant asset write off) where you can claim immediate deductions for any depreciable asset purchase until well before June 30 2022.
Supercharge your super
If you’ve got some extra cash in the bank, contributing extra money to your superannuation is a smart and very tax savvy decision. If you haven’t contributed the maximum amount of super in previous years, the recently introduced carry forward rules allow you to make extra concessional contributions above the general concessional contributions limit of $27,500 without having to pay extra tax. If you’re looking for what could be a bumper deduction, this is it!
f you have any questions or want to clarify anything before your tax meeting in the new financial year, please don’t hesitate to get in touch.