5 tips to prepare your 2019/20 tax return
July 6th, 2020
The last financial year was anything but normal and made life a little (or a lot) different for all of us. Keeping those unusual circumstances in mind is important now that it’s tax time.
If the summer bushfires or coronavirus affected your pay, work circumstances or outgoings in the 2019/20 financial year, read on about tax breaks and other things to consider before lodging your tax return.
Tip 1: Boosting your super while reducing your tax
The concessional contributions cap amount is set at $25,000 per financial year. However, the Carry Forward Rule allows you to make additional concessional contributions to your super account by using unused concessional contribution cap amounts from up to five previous financial years.
To be eligible, your total superannuation balance must be less than $500,000 on the 30th of June of the previous financial year. Concessional contributions include Super Guarantee (compulsory contributions paid by your employer), salary sacrifice contributions, and personal deductible contributions.
If you would like further information regarding concessional contributions, talk to our Member Services Team on 1300 360 988 or by email.
Tip 2: Reduced working hours may give you a bigger tax refund
If your working hours were reduced or you were stood down last financial year, you may be eligible for a bigger tax return than usual. This is because you would have been paying tax on an assumed higher income if you were earning more earlier in the financial year.
Getting your tax return done early could deliver a small windfall that you can use to cover essentials, pay down debt, or take care of any urgent financial commitments.
Tip 3: Claim for charity donations
Many people generously donated to a range of charities over the bushfire season. Check your PayPal and email receipts to track down tax invoices for your donations, as they are 100% tax deductible if the charity has Deductible Gift Recipient (DGR) status.
Tip 4: Claiming your working from home expenses
If you had to change to working from home (WFH), you are eligible to claim WFH expenses as part of your tax deduction. To make life easier, the ATO has introduced the new ‘Shortcut Method’ covering all additional deductible running expenses including phone, internet, electricity and computer depreciation and consumables. All you need are your timesheets to make a claim.
However, depending on your situation it may not give you the best possible claim. The new announcement will affect taxpayers differently. It pays to spend a bit of time working out whether the new 80c per hour Shortcut Method really is best for you, and always seek the advice of a tax agent if you’re not sure.
Tip 5: Link your MyGov account
Set up your MyGov account and link it to the ATO service. This will make life a lot easier at tax time. Many employers use MyGov to provide ‘income statements’ or PAYG summaries, which are still commonly referred to as ‘group certificates’. Sorting this out now will save stress at tax time.