Please check the following and bring along payment summaries, statements, accounts, receipts, etc, to help us to prepare your return:

Income

• PAYG Payment Summaries for salary and wages
• Foreign Source (employment, pension & investment) Income, and details of any foreign tax credits or expenses incurred
• Lump sum and termination payments
• Government pensions and allowances
• Other pensions and/or annuities
• Allowances (e.g., entertainment, car, tools, directors fees, jury fees)
• Interest, rent and dividends
• Distributions from Partnerships, Trusts or other distributions including Managed Funds
• Net Income / Loss from business
• Income received from Life Insurance
• Details of any assets sold that were either used for income earning purposes or which may be caught by Capital Gains Tax (CGT)

Deductions (in addition to the above)

• Award transport allowance claims
• Bank and government charges on deposits of income, and deductible expenditure
• Bridge/road tolls (travelling on business)
• Car parking (when travelling on business)
• Conventions, education, conferences and seminars
• Depreciation of library, tools, business equipment, incl. home computer
• Home office running expenses:
  • Cleaning
  • Cooling and heating
  • Depreciation of office furniture
  • Lighting
  • Telephone, tablet and internet
• Interest and dividend deductions:
  • Account keeping fees
  • Ongoing management fees
  • Interest on borrowings to acquire shares
  • advice relating to changing investments (but not setting them up)
• Interest on loans to purchase equipment or income earning investments
• Motor vehicle expenses and business related travel expenses
• Overtime meal allowances
• Sun protection items
• Laundry
• Telephone expenses (business)
• Tools and equipment of trade
• Subscriptions to trade magazines
• Union fees
• Rent/lease payments
• Utilities: electricity, gas and water
• Legal Fees

Other Deductions

• Superannuation contributions by sole traders or substantially unsupported taxpayers
• Tax agent fees
• Gifts or donations to charities and registered School Building Funds
• Financing Lease payments
• Income Protection Premiums

Investment Related Expenses

• Interest / Fees on investment borrowing
• Investment publications ie. Financial Review magazines
• Account keeping, ongoing management fees

Investment Property

• Body corporate fees
• Advertising expenses
• Cleaning
• Council/water rates
• Insurance
• Interest on loans
• Land tax
• Legal expenses
• Property Agent/Management fees
• Stationary, telephone, postage
• Sundry rental costs
• Borrowing expenses
• Gardening/lawn mowing
• Pest control
• Capital works deductions
• Genuine repairs and maintenance
• Telephone expenses
• depreciation

Offsets

• Private Health Insurance
• Dividend imputation credit

HELPFUL HINTS

Remember the ATO is very good at picking up mistakes and this can lead to “please explain” requests and penalties.

They have advanced technology and access to numerous sources of data.

To claim a deduction for work related expenses:

• You must have spent the money yourself and weren’t reimbursed
• It must be directly related to earning you income

You can only claim the work related part of expenses.  You can’t claim a deduction for any part of the expenses that relates to personal use.

As a General Rule

• Claims for work related deductions above $300 must have written evidence
• You can get an immediate deduction if certain income producing assets costing $300 or less are purchased

Working from home – COVID-19 changes

From 1 March 2020 to at least 30 June, the ATO has devised a new optional method for work-related tax deductions in light of more people working from home.

If you have not been reimbursed by your employer, you can claim at a rate of 80 cents for each hour you work from home.  To use this method, you will need a record of the hours you have worked, such as a diary or timesheet.  It can covers running expenses such as electricity & gas, decline in value & repair of capital items such as office furniture, cleaning expenses, phone & internet expenses, stationary & decline in value of computers in devices.  The COVID-hourly rate can be claimed per individual (not limited to one per household)

Car Expenses

You can claim a deduction when you drive from your normal place of work to a different office, site or place of work.

You generally can’t claim the cost of trips between home and work.  There are limited exceptions.

You don’t need written evidence to claim motor vehicle expenses using the cents per km method (a maximum of 5,000 kms can be claimed) but you will need to justify the kms travelled. 

The other method is to keep a logbook to determine the work-related percentage.

Phone and Internet Expenses

You can claim if your employer needs you to use your personal devices for work.

You can only claim the work-related portion of the use of your personal devices.

Clothing Expenses

You can claim a deduction for the cost of buying, hiring, mending or cleaning certain uniforms that are unique and distinctive to your job, or protective clothing such as non-slip nursing shoes or support stockings, that your employer requires you to wear.

You can’t claim deductions for the cost of buying or cleaning plain clothing for work, even if you only wear it for work.

Self Education Expenses

You can claim a deduction if your course relates directly to your current job. 

You can’t claim if only related in a general way or to help you get a new job.

Home Office Running Expenses

Can be claimed without reference to receipts.  You should keep a four week diary of home office use.

Investment (Holiday) Property

Claims can only be made where the property is available for rent and not mainly used by owners, family and friends.

Prepayments

When prepaying expenses before 30 June 2020, ensure that any services are provided within 12 months of the payment and before 1 July, 2020.  Otherwise, the deductions must be claimed over the period of the prepayment.

Crypto currency data matching program

The ATO is collecting bulk records from Australian crypto currency designated service providers as part of a data matching program to ensure people trading in crypto currency are paying the right amount of tax, and correctly meeting their tax (and superannuation) obligations.

Rental Properties

Rental properties are always high on the ATO’s agenda & this year will be no different.  The AO continues to find errors.  Common issues include:

• over-claimed interest
• claiming deductions for properties that are not genuinely available for rent
• capital works claimed as repairs
• omitted income from accommodation sharing

Deliberate cases of over-charging are treated harshly with penalties of up to 75% of the claim.

Deductions no longer available for vacant land

From 1 July 2019, new rules prevent some taxpayers (individuals, closely held trusts, SMSFs & unit trusts or partnerships where interests are held by individuals, discretionary trusts or SMSFs) from claiming a deduction for interest & other holding costs for the property that they own. 

The new laws apply retrospectively to losses or outgoings incurred on or after 1 July 2019 regardless of whether the land was first held prior to this date, & with no grandfathering in place, the amendments not only impact those intending to develop vacant land but those who have acquired land to  develop.

Study loan repayment threshold

If you have study & training loans, the 19/20 compulsory threshold is $45,881 (20/21 $46,620).

Early access to Superannuation

Individuals in financial distress as a result of the coronavirus pandemic are able to self certify & apply for early release of up to $10,000 of their superannuation in 2019-20 & again in 20-21 (up until 24 September 2020.

To be eligible for early release, you should ensure you meet the eligibility criteria:

• You are unemployed, or
• You are eligible for jobseeker, parenting payment or special benefit or farm household allowance, or
• On or after 1 January 2020, you were made redundant, or
• Your working hours were reduced by 20% or more, or
• For sole traders, your income reduced by 20% or more

The early release of superannuation measure is available to Australian citizens, permanent residents & New Zealand citizens with Australian super.  Eligible temporary visa holidays can also apply for a single release of up to $10,000 before 1 July 2020.

Talk to us TODAY for any questions you have.

Important Information

This is general advice only & does not take into account your financial circumstances, needs & objectives.  Before making any decision based on this document, you should assess your own circumstances or seek advice from your financial adviser and seek tax advice from your accountant at JKR Accounting.  Information is current at the date of issue and may change.