A lot of us dread tax time… More life admin. Not much fun.
But before your eyes glaze over, read on… let’s get to the best bit first.
Did you buy a new handbag this year? Claim it on your tax return!
Yep. Really. Do you pop your laptop, paperwork, phone and other work things in your bag to take them to work? Claim it as a tax deduction. The amount and way you can claim depends on how much use is exclusively for work, and also the cost of the bag. It doesn’t matter if it’s pink leather with tassels and fluffy charms or playing-it-safe black! Find out more here. You’re welcome.
Who would’ve thought that an article on tax tips would include talk of pink leather, tassels and fluffy charms? But here we are. Now, don’t lose interest, because we have some really useful tax time info to share. We’ll be quick. Grab a cuppa or fill your glass and we’ll be finished before you are.
Did you work from home this year? Ummm… didn’t we all?
COVID meant that many of us spent a lot of time working from home and an inordinate amount of time deciding whether we really needed to wash our hair for a Zoom meeting. The cost of working from home can be a tax deduction. You can’t claim anything your employer has paid for, but there are three methods of claiming expenses for the hours you worked at home:
The ‘Short Cut Method’ / 80c per hour to cover all expenses. Bonus? You don’t even need to keep records! Very appealing.
The ‘Fixed Rate Method’ / 52c per hour plus phone, internet, computer consumables and stationery, decline in value of equipment (computers, phone, etc). So, some calculating will be needed.
The ‘Actual Cost Method’ / Exactly as it sounds… there’s lots more record keeping required. But maybe that’s your thing? Or there could be more value in it.
What sort of work do you do? There are specific things you can claim.
The ATO has thoughtfully provided a handy resource so you can find work related deductions for the industry you work in. You must have personally paid the expenses (you can’t claim if your employer has already paid, or they will reimburse you). The expenses must be directly related to earning your income and you must have receipts. If you’re like some of us here at SF (who shall remain nameless), it’s a good time to start flattening out that collection in your wallet.
What’s on the ATO’s hit list this year?
Every year the ATO focuses on certain areas to make sure we’re not being naughty with our tax returns. This year they’re on the look out for:
Cryptocurrency trading / If you’ve made a gain from buying and selling cryptocurrency it’s taxable as a capital gain. That’s the bottom line. Even if the crypto hasn’t been cashed for Australian dollars. The ATO continues to gain more access to data and the ability to track and identify people investing in cryptocurrency. So, make sure you report any gains in your tax return.
Work related expenses / They’ll have their eagle eye on double dipping and claiming items that aren’t work related. An increase in work from home deductions is expected, but things like uniforms and work travel claims should reduce.
Rental properties / Everyone loves ‘negative gearing’ but the ATO will have it under the microscope this year, looking for unusual, excess expense claims against property income.
When do you have to lodge your tax return?
Good question, and one to keep on top of. If you’re lodging yourself – go you! – you have until 1 November 2021.
Using a registered tax agent? Providing you have lodged tax returns in the past on time, you’ll have up until May 2022 to lodge this year’s return.
Now, take all that info and go live your best tax time life. You’ve got this.