This time a year ago our September newsletter was full of Coivd assistance measures and navigating our clients through the uncertain path of the Covid pandemic. Sadly, Covid still dominates our headlines and we continue to work our way through what we are are calling 'the new normal'. While we are enjoying our freedom here in QLD, a shout out to our interstate clients who are still in the thick of it. Please contact our office for any assistance you may require with finding out if you are eligible, or accessing any current relief measures. And stay safe.
The first quarter of the 2021 tax year is quickly drawing to a close. We have hit the ground running and have been busy processing client income tax returns for last financial year. If you are still to gather your tax records, see below for our handy checklists on what we require to complete your tax return. Did you know it's not always necessary to book an appointment to get your tax complete? You can email your tax information, upload it to your MHP Client Portal or drop it into our office. We can start processing your income tax return and call you should we need any further information or have any queries we wish to address. However, appointments are always welcome!
With the end of a quarter also comes tax obligations. Remember to pay superannuation to your employees by the 28th of October and be sure to pay your WorkCover premium by the 30th September if you haven't already. Quarter one BAS' are due on 25 November (if you lodge electronically, due earlier if you still lodge by paper). Please note; STP finalisations are now overdue as are any Taxable Payments Annual Reports. You can find a link at the end of the newsletter that will take you to all the latest and upcoming tax due dates.
Read on for the latest news in the tax and accounting world. Our September Tax Time newsletter will cover;
- In House News
- Tax Time Info
- ATO Focus Areas
- ATO Quick Bits
In House News
Ag Grow Emerald
At the end of June, MHP had a site at Ag Grow Emerald. Jean-Pierre was the face of MHP for the three days and he was thrilled to see some of our clients and chat to the friendly attendees. The lollies were a big hit! We hope to attend again in the coming years.
Client Drop Box
Our client drop box will be installed this month. This will be located at the bottom of the stairs. If you have documents to drop off and don't want to contend with the stairs, simply drop it in our secure drop box, ring the bell and we'll know there is something to collect.
Of course you are always welcome at reception should you wish to hand it over personally.
Moved house? Changed email addresses? New phone number?
Please let us know of any changes to your personal details. If you have an updated physical or postal address, new phone number or email address, don't forget to notify us. We will update our records so that any correspondence we send reaches you. We will also ensure (where applicable) your ASIC company records and statutory records are updated. We can also update these details with the ATO for you should you wish.
Tax Time 2020/2021
What we need from you to prepare your tax
Are your records ready to go? Need help on what we require to complete your return?
Find below our Individual Checklist and Rental Property Checklist. Use these as guides to assist you in ascertaining what records we require to complete your return.
Rental Property Checklist.pdf
Have a Business? Be sure you include;
- Cash, online, EFTPOS, bank statements, credit or debit card transactions covering both the sales and other business income AND any expenses you can claim as a business deduction such as contractor expenses, operating expenses and business travel expenses
- Even if your income is below the threshold you still need to lodge a tax return!
Still unsure? Feel free to contact us for further information or clarification.
Superannuation Guarantee Increase
A reminder that the superannuation guarantee increased to 10% on 1 July 2021.
For salary and wage payments made on or after 1 July 2021, the minimum superannuation guarantee contribution rate of 10% will need to be applied.
Make sure your accounting software is updated to the latest versions to incorporate this rate.
For your interest- Superannuation has been legislated to increase each year until it reaches 12% in 2025.
Tax Tables for 2021/2022
Tax tables help you work out how much to withhold from payments you make to your employees or other payees.
Usually, tax tables are updated and adjusted at the beginning of the tax year. However, tax rates were adjusted last year during the heat of the pandemic to provide some tax relief to employees.
While payroll and accounting software programs adjust for withholding automatically, the information for employees needs to be entered into your system correctly for the withholding to be calculated correctly. So, checking that you are taking the correct amount of tax out of an employees wage is good practice every now and then.
Here are some links to the most commonly used, up to date tax tables.
How Long Does it Take to Get my Tax Refund?
Lodging your tax return electronically speeds up the process and is usually processed by the ATO within two weeks of lodgement. Lodging a paper tax return can take up to 10 weeks!
If you've received notification that your refund has been processed, your refund may take up to five business days to be in your nominated bank account.
If you have a myGov account, you can log in and check your income tax account. There are two dates to be aware of. The processed date is the date the ATO have processed your tax return and the effective date is the date you can expect your tax refund into your bank account.
Medicare Levy Vs Medicare Levy Surcharge
Understanding the difference between the Medicare Levy and the Medicare Levy Surcharge is a question we are often asked. This question also makes it in ATO's the top call centre questions!
The medicare Levy is a tax imposed by the government to collect money to contribute towards Australia's public health system, commonly known as Medicare.
The levy is about 2% of your taxable income. You pay the levy on top of the tax you pay on your taxable income.
The majority of tax payers are liable for this levy. It may decrease if your taxable income is below a certain amount. In some very limited cases, you may not have to pay this levy at all. For example of you are a foreign resident temporarily working in Australia.
Medicare Levy Surcharge
The Medicare Levy Surcharge (MLS) is a levy paid by Australian's who do not have private hospital cover (or the appropriate level of private hospital insurance).
Currently, you will be liable for the surcharge if you are;
a single person with an annual taxable income for MLS purposes greater than $90,000; or
a family or couple with a combined taxable income for MLS purposes greater than $180,000. The family income threshold increases by $1,500 for each dependent child after the first;
and do not have an approved hospital cover with a registered health insurer.
The Medicare Levy Surcharge can be 1%, 1.25% or 1.5% is levied on:
- total reportable fringe benefits, and
- any amount on which family trust distribution tax has been paid.
Why the surcharge? The surcharge is to encourage people to take out private patient hospital cover and use the private hospital system in aim of reducing demand on the public Medicare system.
ATO Focus Areas
In the 21 Financial Year the ATO are honing in on car expenses. With this in mind, its important to know what expenses you can claim and what you can't claim. See below for a summary
You can claim a deduction for the cost of using a car that you own, lease or hire when you drive;
between separate jobs on the same day
to and from an alternative workplace for the same employer on the same day
from home directly to an alternate workplace
You cannot claim a deduction for;
normal trips between home and work. In limited situations you can claim the cost of trips between home and work ie where you are carrying bulky tools or equipment for work
car expenses that have been salary sacrificed or where they have been reimbursed.
It is important to note that you must have true and accurate records of your car use to substantiate your claim i.e. logbook. See out MHP fact sheet below on keeping a log book.
MHPCA Fact Sheet- Keeping a Logbook.pdf
ATO Quick Bits
Sold cryptocurrency, shares or property last financial year?
If this sounds like you, make sure you check out the ATO guide on capital gains tax (CGT) before you lodge this tax time! The ATO have info on CGT, how to calculate your gains or losses and more: www.ato.gov.au/Forms/Guide-to-capital-gains-tax-2021/
Listen out for suspicious phone scams claiming your TFN has been suspended or asking you to pay a fake tax debt via:
- 'cardless cash' ATM withdrawals
- cash delivery in public locations.
These scammers will try to trick you by telling you they're from the ATO or another agency, but remember the ATO will never demand for payment via these methods. If you get a call like this, hang up straight away and warn your family and friends to stay alert.
Businesses: Do you use fuel in heavy vehicles or other machinery?
Remember, fuel tax credit rates increased on the 2nd August.
ABN holders: There are lots of reasons why it's important to make sure your ABN details are up to date. By making sure we have the right info:
- you'll be ready for new government services or grants when they become available
- government agencies and emergency services can contact you during natural disasters
- the right people will have the right permissions to act on behalf of your business.
Be sure to check out the links below and keep up to date with the due dates for your tax obligations.
See you in December 2021
McDonnell Hume Partners