Tax Tips 2021

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Farm Management Deposits 

• These are a great way of deferring income. 

Prepaying

• Is there anything you can prepay such as fertiliser, fodder or veterinary supplies?

Write-Offs

• The instant asset write-off has increased from $150,000 to unlimited from the 6th of October 2020 to 30 June 2022.
• For example, if you were to purchase a new tractor for $190,000, not including GST, then you are able to deduct the full amount off the taxable income of your business. Previously this deduction was generally $28,500 for the first year.
• Prior to this the $150,000 instant asset write off still applies from the 12th of March 2020.

Working from home due to Covid19?  

• You can claim some home office expenses.  Normally the rate is 52 cents per hour for each hour worked at home. From the 1st of July 2020 to 30 June 2021, the temporary rate is 80 cents per hour. This higher rate includes additional costs you may incur, such as telephone or internet, in which you can claim a tax deduction at the lower rate per hour based on business use.  Additional costs to set up a home office may be claimed, such as purchasing a new computer, computer supplies, and office furniture.  

Pre Payments

• Did you know you can prepay 12 months of things such as rent, interest on some loans and, in some cases, equipment finance and get a deduction in the current financial year? What about prepaying subscriptions, union fees or replacing that old Apple Mac?
• Given COVID has forced some of us to work from home, you may have incurred additional expenses that you may be entitled to claim. Please make sure to include these at the end of the tax year to maximise your tax deductions.

Superannuation + Insurance 

• Have you considered maximising your superannuation payment? Are there insurance premiums for income protection you can prepay? 
• If you have not maximised your super contributions in the 2019 & 2020 financial year you may be able to put in more than the normal $25,000 concessional contribution limit utilising the carried forward rules. Please enquire with the office if this may be an option for you to increase your superfund amount and decrease your tax liability.

Donations

• If you have a favourite charity, now could be a good time to pass on the goodwill and make a donation (this is Jim's favourite).

Review Debtors

• as any bad debts can be claimed as a tax deduction.

Stock Valuations

• can take into account obsolete or decreased stock which can decrease your taxable income.

 Change in individual tax rate thresholds

• The tax rate thresholds have increase from $18,201 to $45,000 at 19% and $45,000 to $120,000 at 32.5%.
• This represents reduce tax paid by $1,080 if you earn $45,000 and $2,430 if you earn $120,000.
• These thresholds are expected to remain the same until 2024.

 Company Tax Rate

• The company tax rate has decreased from 27.5% in the 2020 financial year to 26% for the 2021 financial year. As of 1st July 2021, company tax rates will fall to 25%.
• Given the lower tax rate, this may be an advantageous business structure for you. Please enquire at our office if you would like to discuss further.

 Motor Vehicle Rate per km

• This will increase in the 2021 financial year from 68 cents per/km to 72cents per/km. This represents a maximum increase in deductions of $200.

 JobKeeper Payments

• For businesses that received JobKeeper for themselves or their employees, these are taxable payments and need to be included in your taxable income.