With the end of the financial year comes the task of making sure you are organised the set to go with all that is required to lodge your 2019/20 tax return. In this article we asked Registered Tax Agent USHA AGARWAL to provide an update on what you should be taking into consideration to ensure you’re maximising the deductions your are eligible for.

It’s important that you understand and consider all of the deductions that might relate to your personal situation. If you don’t – you might miss out on a tax refund you could be entitled to.

So let’s work through some of the things you need to take into consideration:

Claiming tax deductions for personal super contributions

You may be able to claim a tax deduction for personal super contributions that you make to your super fund from your after-tax income, for example, from your bank account directly to your super fund.

Once you have made the contribution and it has been received by your Super Fund by 30th June 2020, then the next step is to give your super fund a Notice of intent to claim or vary a deduction for personal contributions form (NAT 71121) and receive an acknowledgement from your fund. There are other eligibility criteria that you must meet.

Tax deduction for work assets

If you are an employee and you buy tools, equipment or other assets to help earn your income, you can claim a deduction for some or all of the cost. The type of deduction you can claim depends on the cost of the asset:

  • for items that cost $300 or less, you can claim an immediate deduction for their cost
  • for items that cost more than $300, or that form part of a set that together cost more than $300, you can claim a deduction for their decline in value.

Gifts and donation deductions

Organisations entitled to receive tax deductible gifts are called ‘deductible gift recipients’ (DGRs). You can only claim a tax deduction for gifts or donations to organisations that have DGR status. The person that makes the gift (the donor) is the person that can claim a deduction. You can check the DGR status of an organisation on ABN lookup.

Super co-contribution

If you are a low or middle-income earner and make personal (after-tax) super contributions to your super fund, the government also makes a contribution (called a co-contribution) up to a maximum amount of $500 subject to eligibility.

Instant asset write-off for eligible businesses

Under instant asset write-off, eligible businesses can claim an immediate deduction for the business portion of the cost of an asset in the year the asset is first used, or installed ready for use subject to eligibility and rules.

The thresholds have changed and are as follows:

Instant asset write-off thresholds
Eligible businesses Date range for when asset first used or installed ready for use Threshold
Less than $500 million aggregated turnover 12 March 2020 to 30 June 2020 $150,000
Less than $50 million aggregated turnover 7.30pm (AEDT) on 2 April 2019 to 11 March 2020 $  30,000

Note: On 9 June 2020, the government announced it will extend the $150,000 instant asset write-off until 31 December 2020. This proposed change is subject to the parliamentary process and is not yet law.

For more information you can visit the Australian Taxation Office (ATO) website.

If you need assistance with your Tax or have any questions contact Usha Agarwal by calling her on 044 808 2704 or send her an email. Usha is a Registered Tax Agent and she has been working in tax for over 20 years and has been registered with Tax Practitioners Board since 2012.

General Advice Warning: This blog is not designed to replace professional advice. It has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the advice, in light of your own objectives, financial situation or needs before making any decision as to what is appropriate for you.

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