As we approach the end of the 2021 financial year, it is time for you to review all your records to ensure you maximise your tax deductions in this year’s tax return. Here are some top tax planning tips.
The tax return process is made much more efficient if you have all your documentary evidence organised now, rather than trying to find the documents months later.
Home Office Claims
If you have worked from home there are three methods for which you can claim deductions for expenses such as power, phone and internet costs.
- The actual cost method – involves claiming the actual work-related portion of your running expenses.
- The fixed rate method – includes a rate of 52 cents per hour plus any work-related portion of other home office expenses, such as phone and internet costs.
- The temporary shortcut method – includes a rate of 80 cents for all running expense including phone and internet costs. This method is currently only available until 30 June 2021.
If you are considering making tax-deductible donations in the approaching months, it may be beneficial to bring forward the donation to before 30 June to claim a tax deduction in your 2021 income tax return.
Depositing Super Contributions
Ensure superannuation contributions are deposited early. At least the week prior to Monday 21 June 2021 to ensure that they are recorded by your superannuation fund by Wednesday 30 June 2021.
You could consider making a tax deductible contribution into your super fund. There is the ability to claim the Government’s co-contribution scheme for contributions up to $500. Also, there is the superannuation contribution on behalf of a spouse scheme, whereby you can receive a tax offset of $540 for contributions of up to $3,000.
We recommend you speak to us prior to making a contribution into your super fund.
Consider selling loss incurring assets such as shares to help offset your tax liability from any capital gains on other assets.
If you are a trustee of a discretionary trust, you must document, before 30 June 2021, how the trust income will be distributed among beneficiaries.