As the new financial year is just around the corner, here are some new items to consider from the standard year end matters.

BY SHAREE WEBSTER, CA DIRECTOR, HOLMANS ACCOUNTING & TAXATION

INSTANT ASSET WRITE OFF – THRESHOLD INCREASED AGAIN

As at 12 March 2020, businesses can immediately deduct the business portion of assets up to the value of $150,000, previously $30,000. At this stage, this measure is available until 30 June 2020. The assets at the higher end are for heavy equipment used for business not luxury cars.

For cars, the write off is limited the depreciation car limit of $57,581.

The write off limit is $30,000 for the rest of the year, i.e. 1 July 2019 to 11 March 2020.

Good news is that the deduction is for either new or second-hand assets, in the year the asset was first used or installed ready for use. Assets purchased prior to 30 June 2020 still quality for the immediate deduction.

As always, if you decide to take advantage of the instant asset write-off, you should make the decision based on the needs of your business and its cashflow/finances not the tax savings.

CONCESSIONAL CONTRIBUTIONS CATCH UP

There is no change in the concessional contributions cap is $25,000 for everyone. However, this year, if your super balance is less than $500,000, you have the ability to “catch up” your concessional contributions. E.g. If you contributed $15,000 in the 2018/2019 tax year, in the 2019/2020 year, you can contribute a total of $35,000 – the standard $25,000 plus the catch up of $10,000.

Prior to considering this option, always contact your superfund to ensure you are completing the correct processes to ensure the maximum tax deduction.

Otherwise you may end up making an excess contributions and end up paying more tax than anticipated – not the outcome anyone is looking for.

HOME OFFICE EXPENSES – NEW RATE

The Tax Office will accept a temporary simplified method or shortcut method) of calculating additional running expenses from 1 March 2020 until at least 30 June 2020.

Using this method allows you to claim a rate of 80 cents per work hour for all additional running expenses as a result of working from home due to COVID-19.

Refer to the ATO website if preparing your own tax return to make sure you read all the conditions applicable to this method.

If you use the shortcut method to claim a deduction and you lodge your 2019–20 tax return through myGov you must include the note ‘COVIDhourly rate’ in your tax return.

DONATIONS

Beware not all donations are taxable deductible – if you buy a ticket in a prize home/event – this is not deductible, same for a Go Fund Me page. Make sure the charity is a deductible gift recipient.

As always remember, when it comes to end of financial year – get organised prior to 30 June, and roll into 2020 financial year well prepared and informed.

Disclaimer: This article contains general information only. Regrettably, no responsibility can be accepted for errors, omissions or possible misleading statements or for any action taken as a result of any material in this guide. It is not designed to be a substitute for professional advice, as such a brief guide cannot hope to cover all circumstances and conditions applying to the law as it relates to these items.

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Disclaimer: This article contains general information only. Regrettably, no responsibility can be accepted for errors, omissions or possible misleading statements or for any action taken as a result of any material in this guide. It is not designed to be a substitute for professional advice, as such a brief guide cannot hope to cover all circumstances and conditions applying to the law as it relates to these items.