This end of financial year is a little different for many….
COVID-19 is having an overwhelming effect on individuals, businesses, and the economy. Among all this uncertainty, we are starting to see people and businesses returning to their usual way of life in a measured manner.
Our focus today is on matters we can control, such as our end of financial year tax planning which is an important time for you and your business.
Will you be ready? Do not let COVID-19 distract you from matters you would normally focus on at this time of year. To help prepare for the EOFY we have listed our Top ten points for you and your Business to consider before and after 30 June:
- Have you incurred any deductible expenses this year? Think about allowable deductions while you have been working from home due to Covid-19. You can claim a deduction of 80 cents for each hour you work from home from 1 March to 30 June 2021 if you are working from home to fulfil your employment duties (note that if you claim the 80 cents per hour you cannot claim any additional office expenditure). Make sure you have copies of all receipts.
- If you have updated your motor vehicle which is used for business purposes, ensure you have maintained a new logbook so we can continue to claim the logbook method, otherwise the 5,000km limit may apply.
- What superannuation contributions have you already made, or intend to make prior to 30 June? Before you can claim a deduction for your personal super contributions, you must have given your super fund a Notice of intent to claim or vary a deduction for personal contributions form (NAT 71121) and received an acknowledgement from your Fund.
- For rental property owners, make sure you have all your deductions including copies of repairs which may be depreciable assets. New properties can claim depreciation. If you need a depreciation report, contact our office for details.
- Consider deferring the contract date until after 30 June if you are thinking of selling a profitable asset. This will defer your capital gains tax.
- Ensure you have copies of your investment statements, including dividend statements and bank interest.
- Review your capital gains and losses for your investment and superannuation portfolios.
- Review your investment portfolio. Markets have been in a downward spiral since March so there may be opportunities you can take advantage of.
- For those in pension phase – understand how the $1.6 million Transfer Balance Cap works so you do not incur penalties by breaching this cap. In 2020–21, the transfer balance cap is indexed to $1.7 million, equating to an increase of $100,000.
- If you are already receiving a pension from your superannuation, ensure you meet your minimum pension requirements before 30 June. The Australian Government has temporarily reduced the minimum drawdown rates for Income accounts by 50%. This is to help minimise the impact of market volatility for retirees, and to provide more flexibility to manage your super.