How to Prepare for the Upcoming Tax Season
With the end of another financial year approaching, it’s time to start preparing yourself to lodge your annual tax return. With the Australian Taxation Office (ATO) continuing to increase their tax compliance activities, there are a few key priority areas to be aware of this year.
The recent 2023-2024 Federal budget announcement covered a series of measures designed to strengthen the ATO’s resources in relation to tax collection from individuals and businesses. The additional staffing resources within the ATO will enable an extension of the GST compliance program and personal tax compliance program and enhance data matching capabilities.
Key areas of focus
Individuals
The ATO has identified the below as areas of focus this tax season.
Work-related deductions
Rental properties
Capital gains
Undeclared income
It’s important to know that the low and middle income tax offset (which was potentially available for the 2019 to 2022 tax returns) no longer applies, which may result in lower refunds, or in some cases tax bills.
When lodging your tax return, you need to declare all income sources. You need to provide documentation to support all of your earnings and claims.
Business
There are many expenses common to most small business, and there are a number of expenses that are specific to the industry in which your business operates within.
Expenses claimed must relate to the running of the business and providing goods or services that your business offers.
Key items to note -
Businesses whose benchmarks fall significantly outside the ATO’s small business benchmarks.
Work-related travel expenses – travel fares, accommodation, meals. The travel should be directly related to income producing activities and you need records to verify the travel claims.
Motor vehicle expenses – keep records for fuel, repairs and servicing, finance arrangements, insurance and registration. Keep a logbook to record business-related travel.
Fringe benefits – have you reported all benefits provided to employees?
Superannuation – have you paid the superannuation guarantee on time to employees’ super funds? The ATO will examine your Single Touch Payroll records including superannuation payments.
Instant asset write-off for small businesses– after 30 June 2023 the threshold will reduce to $20,000 per asset for the 2023/24 income year, but there are rules about eligibility so talk to us to see if the asset deduction claims apply to your business.
Our team is ready to support you this tax season. We have in person appointments available, as well as phone and Teams appointment options.
Book your appointment via phone or via the contact us page on our website and we look forward to seeing you soon.
Don’t forget to bring your receipts and documentation with you. If you are a current client and use our secure online client portal, please upload any relevant documentation at least 48 hours prior to your appointment.
Key Dates this tax season
1 July – Individuals and business can begin lodging their tax returns
14 July – Employers must issue PAYG withholding payment summaries to employees by this date
31 October – Last day to submit income tax returns (if not lodging through a tax agent)
15 May – Company income tax returns due for lodgement and payment
15 May – Partnership and Trust income tax returns due for lodgement
15 May – Individual income tax returns due for lodgement if you are using a tax agent
Strategem’s Top 5 Tax Tips
Keep thorough records: Maintaining organized and accurate records is crucial when it comes to claiming deductions. Keep track of receipts, invoices, and any supporting documentation for expenses you intend to claim. This will help you substantiate your deductions and ensure you don't miss out on any eligible expenses.
Be aware of all eligible deductions: Familiarise yourself with the deductions you are entitled to claim. Stay updated on the latest tax laws and regulations to ensure you're aware of any changes that may impact your tax return. Consider consulting with a tax professional to identify all the deductions you may be eligible for based on your circumstances.
Claim all work-related expenses: Deductible work-related expenses can significantly impact your tax return. Ensure you claim all legitimate expenses related to your employment, such as uniforms, equipment, professional development courses, and home office expenses if applicable. Remember to keep records to substantiate your claims.
Don't forget about government benefits and offsets: Investigate government benefits and offsets that you may be entitled to claim. Examples include the Private Health Insurance Rebate, the Low Income Superannuation Tax Offset (LISTO), and the First Home Super Saver Scheme (FHSSS). These benefits and offsets can reduce your tax liability or increase your refund.
Seek professional advice if needed: If you have a complex financial situation, investments, or self-employment income, it's wise to consult with a qualified tax professional. They can provide personalized advice tailored to your circumstances and help you optimise your tax return while ensuring compliance with tax laws.
Top 10 things people often forget to claim
Work-related expenses: This includes items such as uniforms, tools, equipment, and work-related subscriptions or memberships.
Self-education expenses: Costs incurred for courses, seminars, or workshops directly related to your current employment or profession may be deductible.
Vehicle and travel expenses: If you use your personal vehicle for work purposes, you may be able to claim deductions for fuel, repairs, and maintenance. Similarly, business-related travel expenses like accommodation, meals, and transport might be eligible.
Home office expenses: If you work from home, you may be able to claim deductions for a portion of your rent, mortgage interest, utilities, and home office equipment.
Mobile phone and internet expenses: If you use your personal mobile phone and internet for work purposes, you can claim a portion of these expenses.
Charitable donations: Donations to registered charities over $2 may be tax-deductible. Ensure you have receipts or documentation to substantiate your contributions.
Income protection insurance: Premiums paid for income protection insurance policies that provide cover for loss of income due to injury or illness may be deductible.
Union or professional association fees: Membership fees for trade unions or professional associations related to your occupation can be claimed as a tax deduction.
Tax agent fees: The cost of preparing and lodging your tax return by a registered tax agent is generally deductible.
Income-producing expenses: If you earn income from a rental property or investments, you can claim expenses associated with managing and maintaining those investments, such as property management fees, interest on loans, and repairs.
Remember to keep accurate records, such as receipts and invoices, to support your claims. It's crucial to consult with a tax professional or refer to the ATO website to ensure you comply with current tax laws and regulations and accurately claim your deductions.
We are here to help…
If you need further advice on this topic, please do not hesitate to contact our office on (03) 5445 4777 and one of our Accountants will be available to support you.