The year gone by has been a more complicated tax year than most.
With more people working from home and picking up various side jobs due to COVID, as well as cryptocurrency flooding the investors market, you might not be totally sure how to put together your tax return for this financial year.
Here’s what you need to know:
The dates you need to know
The end of the financial year is Wednesday June 30, meaning you can begin filing your tax return from the day after. However, don’t start right away.
Your employer still has until July 31 to give the ATO (Australian Tax Office) your salary, super contributions and pay-as-you-go tax contributions for the year passed. You’ll only be able to file your tax once this is complete.
You can check if this has happened yet via your myGov account and once your income statement is marked as “tax ready,” you can begin filing your tax.
Alternatively, if you decide to file via the help of a professional, you need to make sure to officially enlist their services by October 31. The deadline will then generally be May 15, 2022 for a registered tax agent to file your return.
Otherwise, if filing yourself, you must complete it by October 31.
If it turns out you owe tax to the ATO, you must pay this by November 21. If late, the ATO will begin charging interest on the due amount.
If you’ve been working from home
Writing for the Sydney Morning Herald and consulting an ATO specialist, Jessica Irvine explains the simplest method for calculating your claim for working at home deductibles.
You simply claim 80 cents for every hour you worked from home during the year. If you were really grinding and worked a full 40 hour work week for all 52 weeks of the year, using this method you would claim $1664 as your total deductibles.
All you have to do is produce a timesheet, roster or diary that displays how many hours you worked from home or your general working from home patterns.
Another method that’s slightly more work but may provide a better return, is to instead put 52 cents towards every hour worked from home to account for costs such as extra electricity, power, heating and so on.
Then adding on the expenses of consumables such as stationary, electronics, ink cartridges and whatever else you purchased for work, plus dedicating a work-related portion of expenses such as phone and internet bills.
This method may work better if you paid a lot of work related bills or purchased expensive equipment for work over the past 12 months.
If you’re in the gig economy
Plenty of Australian’s got into a side hustle during COVID and if yours started bringing in some money, you need to know how tax it.
For full info you can check out our tax tips for the gig economy.
Some of the tips from Senior Manager of Tax Policy at GPA Australia, Elinor Kasapidis.
“The ATO is aware of these ‘side hustles’ and matches data from platforms like Uber, Airbnb and AirTasker against individuals’ tax returns. This means the jig is up on the gig economy this tax time.”
“If you drive people around, do odd jobs or free-lance work, rent out your car or storage space, run social media accounts or sell products, you need to declare this income in your tax return.”
“The good news is that your expenses from earning this income may be deductible.”
“You can only claim a deduction for the work-related proportion of your use. Picking up an Uber fare on the way home from visiting mum doesn’t entitle you to write off all your car expenses.”
However, there is no need to declare income for hobbies or activities not intended to make a profit.
“Don’t worry, the hundred bucks you earned from selling your designer hand or off-loading your ‘barely used’ bike on eBay doesn’t need to be reported.”
For property investors
If you own property you should be aware of the range of expenses you can claim.
Some expenses that are deductible include the Emergency Services Levy, mortgage interest, repairs and maintenance, management fees and providing renovations.
Another expense to be aware of, particularly during COVID, is if you had a tenant that was unable to pay rent due to the financial hardship, that cost can be claimed.
Travel expenses for property investors was taken off the list of allowable deductions for property investors in 2017 and you will not be able to claim this. If you’ve been dabbling in Crypto
Crypto
If you’ve purchased Cryptocurrency it’s important to know that it’s not classified as a currency by the ATO but rather as property, which means it’s subject to the capital gains tax when it’s sold.
If you sell or trade your crypto, convert it to flat currency or use it to purchase anything, you’ll need to pay capital gains tax on those transactions.
If filing your own tax you’ll also figure out whether you are classified as an investor or a trader. While investor might not sound as fancy, it will give you a favourable tax rate and simpler filing process.
Unless you’re there trading most days, you’ll likely be classified as an investor.
The ATO will assess you based on if you are trying to make a profit, how often you are trading, if you’re organised like a business and how much capital you have invested.
Some exchange platforms such as Swyftx will provide you with a tax report itself, saving yourself a lot of work, so check if your chosen platform does this before pouring through your receipts.
Superannuation contributions
If you are earning less than 250,000 a year, you can pay a lower tax rate of just 15 per cent on the first $25,000 you put into super each year. All contributions from yourself and your employer, including the super guarantee, are included in this $25,000.
This means if you have contributed less than $25,000 to your super in the previous financial year, you can make a one-off contribution and receive the concessional tax rate of 15 per cent on amounts up to the difference between your current yearly contributions and $25,000.
If you have less than $500,000 then you are also eligible to take advantage of any unused concessional contribution caps from previous years, as far back as the 2018-2019 financial year.
Your MyGov account will tell you how much super you have contributed.