End of financial year (EOFY) is looming. It’s time to begin on your tax return, especially with the changes that have been brought in since the pandemic.
Getting your head around those changes and being organised are key this year. Delays with documents or essential paperwork can mean extra trips to the accountant or having to wait much longer than you’d hoped for any rebate you may be hoping to get.
Here’s your essential tax time tips checklist to ensure you collect what you need before you start to navigate a post-Covid EOFY.
Doing your personal tax return:
Your income You’ll need to supply evidence of salary and wages payments, stand-down payments, redundancy payments, Centrelink payments or business income. And if you received sickness benefits or accident payments, those need to be accounted for, too. If you received JobKeeper payments via an employer, they’ll be automatically applied to your tax return (check your income statements via MyGov). Sole traders will need to include the payments as assessable income.
Expenses Time to drag out that shoebox of receipts! And although you could hand it to your accountant to sift through, you’ll save money if you do a deep dive yourself and pluck out the deductible expenses. Don’t forget to claim for things like charitable donations, vehicle expenses (if you use your car for work purposes), premiums on any income protection policy you may have and more. See the ATO for a list of possible deductions.
Covid-specific expenses Did you work from home during the pandemic? The ATO has a temporary shortcut measure for figuring out what you can claim including utilities, cleaning costs, phone and internet expenses, computer gear (like printer paper and ink) stationery and home office equipment (laptops, printers, phone, furnishings). You can claim the full cost of items up to $300 or depreciation for items over $300. Ask your account to help if you’re not sure what you can claim. You may also be able to partly claim on home insurance, too.
Interest from your bank If you have large amounts in savings accounts or trust funds, you may have earned interest in the past financial year, and you’ll need to account for all of this in your tax return. Often the interest you’ve earned will automatically be accounted for on your tax return but if not, ask your bank for a summary of your interest totals from the past financial year.
Investment earnings Have you put money into property, shares or other investments this year? Don’t forget to provide info on returns or dividends. And if you own an investment property, there may be specialised tax deductions you’re eligible for, including depreciation on wear and tear of items in your property.
Superannuation If you accessed your super during the pandemic as part of the government’s early release scheme, you don’t need to pay tax on these amounts or declare them in your tax return. However, if you paid super, your super provider will send you a payment summary showing how much of the super you received is taxable and how much is tax free, plus other details.
TOP TIP: Remember, to make a claim, you must have spent your own money and not had it reimbursed. The expenses must relate directly to your income and you’ll need proof of purchase (like a receipt). For 2022, why not download the ATO app and upload your deductions through the year.
A business tax return:
Grants and subsidies If your business has received a pandemic grant, JobKeeper payments or other payments as a result of Covid-19, you must retain all records and provide them to your accountant.
Business documents Small businesses doing a tax return should provide a summary of income and expenses in a profit and loss statement. You’ll need to account for purchases you’ve made, employee super contributions, Single Touch Payroll income statements, fringe benefit tax records, GST returns and business activity statements (BAS). You’ll also need to provide a summary of your debtors and creditors. If your business buys and sells products, do a stocktake and provide those records to your accountant, too.
Temporary full expensing The ATO’s increased instant asset write-off has been replaced by temporary full expensing, where businesses with a turnover of less than $5 billion can immediately deduct the business portion of the cost of eligible new depreciating assets. Check with your account to see what’s eligible if you’re not sure.
TOP TIP: If you don’t have a dedicated business account already, it’s a good idea to get one so you can manage all your business payments and expenses in the one place.
You may want to listen to our podcast with mamamia, What the finance, and the bonus episode on tax time and what you can claim.
The taxation position described is a general statement and should only be used as a guide. It does not constitute tax advice and is based on current tax laws and their interpretation.