BOOKEEPING & BUSINESS MANAGEMENT2020-21 end of financial year, tips & tricks
Its nearly the end of May and the end of financial year is fast approaching. These past 12 months have been as crazy as I can remember, so I thought I’d put together a few tips, tricks & reminders for you ahead of needing to complete end of year tax returns. Please note, this is not to be taken as financial advice as such, please consult with your own Accountant / Tax Agent for specific advice relating to your situation.
ScoMo’s $1,080 Tax incentive
The reality behind the Government’s $1,080 “that is being put into the hip pocket’s of low & middle income earning tax payers…” Be aware this is a tax offset – the $1,080 will offset any tax that you need to pay. Eg. if it turns out you only need to pay say $500 tax, then you will only get a $500 offset. You don’t actually get $1,080 paid in cold, hard, cash… Get my drift?
Are you rich?
Check for lost Super
When did you last check the Government records to see if you have any lost Superannuation in your name? If it’s been a while, then log into your myGov account linked to the ATO and click on Manage my super. If you are not already registered for myGov, go to online services to register.
Review your 2020-21 income
These past 12 months, a lot of us have been receiving Government payments and allowances that we’ve never received in the past… Some of these will be Taxable, some may not. All our circumstances will be different. This is just a bit of a heads-up to start recapping your various income for the year and consider where you may fall in relation to the various Tax brackets. Don’t be the person who get’s a nasty surprise come Tax Return time having tax payable on income you didn’t realise would be taxed…
WORKING FROM HOME CLAIM
Most of us have been working from home during the 2020-21 Financial Year and the ATO have just announced a simple deduction rule, that allows you to claim a deduction of an all-inclusive rate of 80 cents per hour worked at home during the period. You just need to have a record of the number of hours you’ve worked from home during the period (eg. timesheet, diary entries).
If you use this shortcut method, it’s intended to cover all “home office” type expenses, so you can’t then separately claim items such as telephone, internet, heating & cooling etc. You can still choose to use one of the existing methods of claiming home office expenses, but you will need to have great record keeping to support any claims for actual expenses. Check out this great article here if you want more info…
If you’re a small business owner, the last thing we generally do is pay ourselves Superannuation…which we really need to change that habit! However, I’ve got a website I can recommend for some sneaky Superannuation contributions. It’s called Super Rewards and when you purchase online from a whole range of different Aussie retailers, a % of your spend is contributed directly into your Superannuation fund. I have to say this kind of justified a lot of my online spending these past 12 months “Hey, I’m contributing to my Superannuation fund”…! Look, every bit helps, right?
Review your recurring subscriptions & memberships
Aren’t recurring subscriptions & memberships to things such as Streaming services, Apps, Productivity Tools, Personal Development websites, Online shopping so easy to set & forget? Well it’s probably a good time to review those Credit Card / Paypal / Afterpay statements etc to see if there’s any that you no longer need or aren’t using? It’s surprising how much some of these can add up to!
Purchases of equipment & assets
Don’t let the likes of JB-Hi Fi and Officeworks trick you into spending $$$ to “beat the tax man”… Please be sure to review the ATO guidelines and get specific Tax advice before you rush out to buy a heap of musical instruments, recording equipment, computer equipment etc in these last few weeks, thinking you can claim it all this year. If you are paying tax as an individual – then you are likely to only be able to claim up to $300 as an immediate deduction this financial year. If it’s over $300 – then that gets apportioned over multiple financial years, as per the ATO guidelines.
When it comes to a Small Business, there’s the $150,000 Instant Asset Write-Off that’s in place this current financial year and extended into next financial year, however there’s specific dates that the purchases need to have taken place prior to, so be sure to review carefully. Here’s all the info right here…
Missing ABN Number?
As you start receiving a lot of your income statements (eg. APRA, Royalty, Merch, Bank) for the June period, take a moment to double check you are receiving the full amount you are entitled and no “ABN Withholding tax” amount is being deducted. When you don’t provide an ABN number, the payer is obliged to Withhold 47% of the payment due. This is referred to as a “no ABN withholding tax”. The onus is really on you, so if this is being deducted and you have an ABN, best you get in contact to sort that out! If you don’t have an ABN, then maybe it’s time to look at getting one….?
Can’t tune a Guitar, but I can crunch Numbers!
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