With the end of the 2020 financial year approaching,
here are a few LAST MINUTE things you might want to consider:
- For those of you have worked from home recently, you can claim a tax deduction for doing so. The ATO offers a special COVID-19 flat rate of 80 cents an hour, without the need for receipts (just a record of hours worked). If there were two of you working from home, you can both claim this.
But beware it might be worth seeing if you can claim more by the time you add up the work portion of your phone/ internet/ office furniture/ tablets and bills.
- Maximise your Motor Vehicle Deductions. There are two choices of how you can claim travel using MV. If the annual travel claim does not exceed 5000kms, you can claim a deduction using cents-per-kilometre basis.
If your business travel exceeds 5000kms you can use the logbook method to claim for your total car-running expenses. Your logbook can last for 5 years, but if you have changed the way you use your MV, then Update your logbook to ensure you are claiming the most accurate amounts for your MV expenses.
- It may be too late for you to pre-pay your investment interest for the next 12 months, but consider it in a years’ time if a Capital Gain Tax event takes place, or if in FY2022 you might retire, be made redundant or have a baby.
- Concessional Contributions can be made into Super from your pre-tax dollars. For PAYG this can be done via Salary Sacrifice so if you haven’t been doing it, consider it from July onwards.
For the self-employed and those Employees who want to contribute up to $25,000, you still have this week to contribute to your super fund (it can take a few days to process so don’t leave it).
If you choose to contribute additional super, ensure you have completed an intent to claim a deduction form, sent it to your superfund and have received acceptance of this claim from your Fund.
For example if you contribute $25K each year into Super. Even though these contributions get taxed at 15% on the way in, the whole amount is immediately tax deductible. This can save you up to $8,000 in tax every year (47% less 15%).
- For small businesses, the Instant Asset Write-off allows you to claim the full cost of a business asset and for a short time the threshold is $150K. (now extended to 31 December 2020)
Remember this only applies to removable assets. If you repair the roof of your office building, that’s a repair (immediate deduction). If you replace the roof, that’s not removable and no, not an instant write-off, so you instead would claim the depreciation over many years.
- Review values of closing stock at 30 June 2020 and write down the value of the stock to market selling value where market selling value is less than cost.
- Scrap depreciable assets laying idle and are not expected to be used.
- Review debtors to identify bad debt and write off the bad debts before 30 June 2020.
- Can Employee bonuses to be approved or declared before 30 June 2020.
- Small businesses can make prepayments before 30 June 2020 for periods of up to 12 months, eg: Rent, Insurance or Subscriptions
See you all at tax time!