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Your Work-Related Tax Deduction Checklist For This Year’s Tax Return Made Easy

The end of the financial year is coming up next month (30 June), and you may be looking for ways in which you could make tax savings in this year’s tax return. This could be through tax deductions, expenses that you could make now for your work purposes or even with tax offsets introduced by the government. Whatever your tax situation, we’re equipped and ready to help you navigate the tricks and traps of income tax returns.

Upon completing a tax return, individuals are entitled to claim deductions for expenses that are directly related to their income. These can come in a variety of forms, but must usually be work-related to be claimable. 

There are three requirements individuals must meet to be able to claim a work-related deduction:

If an expense was for work and private purposes, individuals can claim a deduction for the work-related portion.

Here are some common types of deductible expenses taxpayers like employees and rental property owners can claim this financial year:

Home Office Expenses

The past year may have seen you working more from home or remotely than ever before, and setting up a home office may have incurred a number of additional expenses. Some of the expenses that you may be able to claim as tax deductions include

With home office equipment, you may be able to claim either:

Unless you meet very specific requirements, you probably will not be able to claim for home expenses, such as mortgage interest, rent and rates, or the cost of general household items. 

If you plan to use the temporary ATO approved ‘shortcut method’ (80 cents per hour for all additional running expenses) to claim your deductions, you cannot claim any other expenses for working from home for that period. If you purchased a desk to use when working from home for example, you cannot claim a deduction for that separately as it is covered by the 80 cents per hour work rate. The deadline for this method of calculation is 30 June 2022 (unless it is extended). 

Clothing Expenses

Individuals can make a claim for work-related clothing expenses including compulsory, non-compulsory and registered uniforms, occupation-specific and protective clothing, and expenses associated with work-related clothing, such as dry cleaning, laundry and repair expenses.

Self-education Expenses

Individuals can prepay self-education items before the end of the income year, including:

–        course fees (not HECS-HELP fees), student union fees and tutorial fees

–        stationery and textbook purchases

Other Work-related Expenses

Individuals can prepay the following expenses before 1 July 2022:

–        union fees

–        seminars and conferences

–        subscriptions to trade, professional or business associations

–        subscriptions to magazines and newspapers

If you are looking for assistance in working out potential expenses that you could incur prior to the end of the financial year, have queries about your claims or just want to prepare for 30 June 2022, start a conversation with us now. We are tax planning professionals ready and willing to help. 

 

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Super Guarantee Change – Deadlines, Payments & Everything Your Business Needs To Know Before The EOFY

Posted on May 23, 2022 by admin

It is easy to get caught out with superannuation, particularly when you are the owner of a business. With so many things to occupy your mind, superannuation may slip from the forefront.

But as a business owner, you must pay the superannuation guarantee for your staff, and you must pay it on time. A failure to pay it on time will mean that you are no longer able to receive a tax deduction for the payment for that financial year. 

On top of that, you can face hefty penalties (which you won’t get a tax deduction for either!). Now imagine being five days late on a $10,000 super payment, losing the tax deduction on that payment and then copping a $20,000 penalty as well. 

The first thing is to make sure that your super is paid well before the time it is due. This should be a priority payment (a payment that you make before anything else).

As the end of the financial year approaches, it is time to be thinking about the June Super Guarantee payment. You may have until July 28 to make the payment but leaving it until then will not net you a tax deduction until the next financial year. From a tax perspective, this may not be what you want to do (unless you know that in the next year, you will need more tax deductions).

Superannuation also has a few strange rules when it comes to claiming a tax deduction.  For employee superannuation, it is critical that it is paid on time.  More than that, the money has to actually be in the bank account of the super fund for you to claim a tax deduction.  

Unlike other expenses where you can show the money coming out of your bank account, this money needs to be present in your super fund for you to make the claim. If your super guarantee payment hits the bank account of the super fund on June 30th then you can claim a tax deduction for that year.  If, however, it hits the bank account on July 1st then the tax deduction is claimed in the financial year after.

Problems arise when you are paying your super through a clearing house, which takes a number of days to clear your payment and get it to the super fund. For example, you may pay the clearing house on the 25th of June, but your super fund does not receive it into their bank account until the 1st of July. 

The ATO’s Small Business Superannuation Clearing House usually has some concessions in these instances.

If you want to get a tax deduction for your June Super Guarantee payment, you need to work out with your clearing house the latest day that they can guarantee that the super fund will then receive the payment this financial year.  Some of these clearinghouses are quoting that you should be paying as early as the 14th of June.

Finally, with regards to Super Guarantee, remember that the rate increases to 10.5% from 1st July.  This rate applies to wages paid on or after July 1st so make sure your payroll system either automatically updates the rate or that you have updated it to reflect the increase.

Employers who fail to meet their Super Guarantee obligations may also be liable for a range of penalties or charges on top of the super guarantee charge. 

Paying super is an important part of being an employer. To ensure your business remains compliant, remember to: 

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