How To Get The Most Out Of Tax Returns In 2021?

February 17, 2021    Accounting Services Perthwa

Tax time has approached, and many things have changed from the past financial years. Also, due to the Covid-19 pandemic, the economic condition of the businesses has been affected. Job seekers, work from home, job keeper payments, etc., can have a massive role in lodging and preparing a tax return. If you are not fully aware of tax deductions, reviewing your tax, tax returns, etc., the top accounting firms in Perth can guide you. Here are some things to guide you with preparing and lodging a tax return.

Who should prepare a tax return?

Australian citizens earning more than $18201 from 1st of July 2019 to 30th of June 2020 must pay the tax. Most importantly, even if you haven’t earned more than what you must, you must still lodge a tax return. According to the ATO, Australian Tax Office, some low-earning people are exempted from this, and the details available on the official site.

The required documents

Based on the sector you work in, you must submit all the essential documents to complete the tax return process. It will also help in claiming tax deductions, and the documents are listed here. Before you start filing for a tax return, collect all the details, and make tax time easier.

  • The PAYG summary provided by the employer
  • Statements outlining the details of the private health insurance
  • Bank statements showing the interests earned by you
  • Details of payment summaries from Centrelink regarding relief packages and government assistance
  • Receipts of charitable documents
  • Tax deductions

The items claiming tax deductions will vary depending on the industry you work. In general, the things to claim deductions are travel expenses, uniform-related expenses, self-education, etc. The expenses are directly related to the earning of your income and for which you can provide proof of purchase. Remember that if you are claiming deductions, you should have all the proofs related to that.

Claiming a deduction for working from home

For ATO this year, the sifting of working from home is a key factor. In 2020, the ATO has come up with an alternative to calculate the tax deduction. It is related to people who have spent working from home from 1st March 2020 to 30th June 2020. In covering the eligible tax deductions, individuals can claim 80% for every hour you have to work from home. It includes phone use, electricity, and a decrease in the value of items while working, etc.

The reduction in the tax rate for small business

For businesses with lower turnover, the tax rate is not too high. You may not know the exact details about the same, which is why you should hire bookkeeping and accounting experts. They can calculate your tax return while considering the deductions accordingly.

Paying employee superannuation

If you wish to claim a tax deduction, remember that you have to claim employee superannuation payments. Do not wait until the last minute, as delaying the process can lead to more troubles for you. Due to just a few minutes delay, it might move to next financial year's deduction instead of this year

Instead of dealing with such circumstances, it is better to update everything before time.

Investing in your business

If your business requires some investment, you can do so, like buying an electronic or a vehicle for transportation and include it in the business tax bill. It comprises any stationary thing, a piece of furniture, new software, etc., which is needed for you to work smoothly.

Payments made for maintenance and repairs

If you have spent any amount on maintenance and repairs, you should have the details with you. It will help in claiming a tax deduction if you have information, like receipts, etc.

Writing off bad debts.

Writing-off all the bad debts and reviewing the trade debtors must be done before the last date. It is better to prepare a management meeting document providing details of every debt as proof. These need to be entered into the accounting system or bookkeeping.

An extra piece of advice

The application for tax deduction varies from one sector to the other. The accountant Perth will maximise your deductions as per the guidance provided by the ATO regarding specific occupations. In case the occupation you are looking for is not listed, you should look for something similar to your business. It may happen that you are not familiar with all the information, but hiring an accountant will be helpful.

Look for specific details.

If ATO is paying specific attention to work regarding vehicle expenses, clothing deductions, etc. Then you need to be careful when checking the eligibility criteria as a small mistake can change the entire tax payment structure. If you have a skilled and professional accountant, he must have kept all the substantial details claiming deductions.

Defer your income

When it is tax season, business owners will decrease the income while increasing expenses. It is possible to do based on the timing of the expenses and income, and an accountant can do it appropriately. Even after that, you have to pay the tax, but the amount will be lower. It is a great way of saving some money for small businesses.

The process to lodge your tax return.

It’s time to look for an efficient tax agent and file the tax return. If not, you can visit the official website of ATO and fill in the details. But it is better to file the tax with a registered tax agent. The professionals are well-aware of your occupation and know which category you fall in. With that, they can exactly calculate the tax deductions and submit the proofs so that you can get the benefit.

Ending note

It is time to choose the best accountant so that you can file for a tax return at the right time. With that, you can be stress-free while they will look for all the other aspects. Make sure you hire the best professionals if you want to pay lower taxes in 2021.

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