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18 June 2021

End of Financial Year Prep 2021 - Individuals

End of Financial Year Prep - Individuals

Super Contributions

  • The threshold this year for pre-tax or concessional super contributions is $25,000. This includes the 9.5% super guarantee contributed by an employer and any salary sacrifice contributions made
  • You can contribute extra super up to the $25,000 threshold, taking into account any other personal super contributions paid in the current financial year, the 9.5% super guarantee payments made by your employer and any salary sacrifice contributions, before 30 June
  • You may be able to carry forward your unused cap from previous financial years if you did not contribute up to the $25,000 contribution cap in 2019 and 2020, and add it to your cap for this year
  • This carried forward rule only applies to individuals with a super balance under $500,000
  • To check how much has been contributed to your fund in this financial year and your super balance contact your super fund provider
  • A pre-tax super contribution may be claimed as a deduction on your 2021 tax return
  • The contribution must be received by the super fund by 30 June to be deductible in your 2021 tax return, so super funds have requested payment is made by COB 23 June 2021 to ensure it is processed by the end of the month
  • A Notice of Intent to Claim form must be lodged with your super fund before your 2021 tax return is prepared as a requirement for claiming super contributions on individual tax returns

Home Office Costs

  • The short cut method for claiming home office deductions has been extended by the ATO, so it can be claimed in the 2021 tax year. 
  • Using this method you can claim 80c for every hour worked from home between 1 July 2020-30 June 2021
  • This method covers all your home office costs, such as phone, internet, office furniture, electricity, etc, so you cannot claim anything else on top of this for home office deductions
  • Alternatively, you may be able to claim a portion of your home running costs on your tax return as home office deductions, depending on your situation
  • If you use this method you will need to calculate the portion of your home costs that relate to your work or home office
  • Bear in mind, if you live in your own home and use the actual cost method, there may be capital gains tax implications in future, when you sell your property 

Donations

  • Consider making a donation to a registered charity before 30 June
  • Any donations can be included as a deduction on your 2021 tax return, just make sure you keep a record or receipt of any donations paid over $2.00
  • The Stepping Out Program is a charity supported by AFYF, with Stuart & Carron volunteering their time on the marketing committee and as chair respectively. The program provides vital support to survivors of childhood sexual abuse. To read more about their work or donate check out their website here.

Equipment

  • If you are thinking of upgrading or purchasing new work-related equipment soon, you can do this before 30 June and include the cost as a deduction on your 2021 tax return
  • The equipment must be directly related to your income or employment to be deductible

Motor Vehicle Logbook

  • Make sure your car logbook is up to date for the 2021 financial year
  • The ATO is focusing on motor vehicle claims and log book records more each year, so if your log book is out of date (over 5 years old) or if your car use or employment situation has changed since you last recorded a logbook, we would recommend updating your records with a current logbook of your car use for 2021
  • For more information on logbooks and claiming motor vehicle expenses please read our article here

Income protection insurance

  • Now is a good time to consider whether you need to take out an income protection insurance policy, depending on your personal income circumstances. The cost of an income protection policy may be deductible on your tax return
  • If your income protection insurance is paid through your super fund it is not deductible on your individual tax return
  • If you already hold income protection insurance, consider pre-paying your premiums for the year ahead to receive a greater deduction in the current year

Superannuation accounts

  • If you have multiple superannuation accounts with various funds, now is a good time to consolidate these into one fund.
  • Consolidating super accounts into one fund will help minimise fees and paperwork, and will make it easier to track your super earnings in future
  • Read more about consolidating super accounts here

Work related education expenses

  • Consider paying for any deductible education expenses before 30 June to increase your deduction in your 2021 tax return
  • Education costs must be directly related to your current employment by maintaining or improving the skills or knowledge required by your employment or are likely to result in an increase to your income from your current employment
  • If your education costs are reimbursed by your employer, they are not deductible

Other deductions

  • Bear in mind that to include the running costs of a home office or telephone and internet usage on your individual tax return, the ATO requires records of itemised bills for a minimum period of 4 weeks
  • Make sure you keep records, in the form of receipts, invoices, bank statements or diary notes, of any other deductions to be able to include them on your 2021 tax return

Preparing for your tax return

  • As you receive receipts, distribution or dividend income information, or other details relevant to your return, you can upload these directly to your AFYF client portal, so they are on file, ready for when we come to prepare your 2021 tax return 
  • If you have quoted your tax file number to your health insurance provider the details will be available to us via the ATO. Alternatively, if you have not provided your TFN, you will need to send us a copy of your annual health insurance statement to add to your 2021 return details
  • If your employer reports payroll through STP (Single Touch Payroll) they may not issue you with a payment summary, but your details will be available as an income statement on your MyGov account. We can also access these details via our tax agent portal with the ATO
  • For a checklist of details needed for tax returns please refer here

Change of details

  • If you have changed your name or address in the past year, please get in touch with our office, so we can update our records and inform the ATO of the changes as well

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.   

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