What are the tax return deadlines for 2021 and the tax return deadline for 2022

What a daunting time of the year, tax time, personal taxes have a deadline and so do businesses who have taxes to lodge.

Tax Deadlines for Individuals in 2021 and 2022

For personal taxes: if you have a job and work for someone on a salary or wages, you are subject to a time restriction when lodging each years taxes. For you, you must lodge before 31 October 2021, however, this is if you have never or don’t have a tax agent linked to your TFN (Tax File Number).

If you have a tax agent and you use an accountant registered with the tax agent board (search here) if they are TAB registered accountants, then your personal taxes are dues on the 14 May 2022, the extension is always granted to accountants and their clients by the tax agent board.

Tax Deadlines for Businesses in 2021 and 2022

For business taxes: the same will apply regardless of the entity type, some larger corporations have further extensions please speak to your accountant. When you are lodging your GST and BAS statements you have one month or 28 days after the date the BAS, GST and PAYG is due. If you have more than one year’s tax return late the maximum fine for a personal tax return not lodged can be fined a maximum $770 per calendar year. As we specialize in the late lodgment of tax returns, our software goes back to 1999.

If you haven’t lodged since 1999 or any years between 1999 and 2022 we are here to assist you to lodge them all in one day with our simple process, please speak to us here, SMS us on 0488 854 200.

What You Can and Can't Claim - Working From Home Tax

The way we work is changing, and for many people working from home is the new normal. This allows for a huge amount of flexibility plus there are numerous ways to deduct home office costs in your tax return.

Many people don't know they are able to claim for working from home and often miss out on valid deductions. But it's important to make sure you stay within the rules to avoid being penalised for making a mistake.

The most common errors are: claiming too high a work-related proportion for a particular type of expense, claiming something that shouldn't be claimed at all or simply not keeping records to substantiate the expense.

If you work from home (either part-time or full time) then some portion of the home office expenses may be claimed as a tax deduction. However, if you set up your home office in a room that is shared or has a dual purpose (such as a living or dining room), you can only claim the expenses for the hours you had exclusive use of the area.

What are the rules for claiming expenses when you work from home?

If your home is your place of work and you have an area set aside exclusively for work activities, you may be able to claim both occupancy and running expenses. If you carry on your work or business elsewhere (such as an office) but do some work at home occasionally, you cannot claim occupancy expenses even if you have a home office area set aside.

Home office expenses you might be able to claim include:

Occupancy expenses Such as rent, mortgage interest, rates, land taxes and house insurance premiums (but only in limited circumstances).
Heating, cooling and lighting You have to heat your home office in the winter and keep it cool during the summer. You also need light to see what you're doing! That means that you can claim a proportion of the various household utility bills that relate to the time you spend working in your home office. You can't claim for periods where the home office space is being used for other purposes and nor can you claim for the element of your bills that relates to the rest of your home.
Home office equipment, including computers, printers and telephones You can claim the full cost (for items costing up to $300) or the decline in value (for items costing $300 or more). If you're self-employed, you may be able to immediately write-off equipment costing up to $20,000.
Work-related phone calls (including mobiles) and phone rental You can claim a portion reflecting the share of work-related use of the line if you can show you are on call, or have to phone your staff, employer, customers or clients regularly while you are away from your workplace.
Depreciation of home office furniture and fittings If you kit out your home office with furniture such as desks, shelving and cupboards, you can claim a deduction for the decline in value of that furniture to the extent that it relates to your work activity. That's likely to lead to a write-off of the cost over a period of several years (the "effective life" of the asset).
Depreciation of office equipment and computers Similarly if you purchase items of technology for use in your home office, you can depreciate them over their life and claim a deduction each year for the work-related element. That might include:
- Computers
- Laptops
- Tablets
- Mobile phones
- Printers
Other items Make sure you claim for the work-related proportion of other costs such as:
Computer consumables (like printer ink)
Stationery
Telephone and internet costs
Cleaning costs
Costs of repairs to your home office furniture and fittings

The table below shows the deductions you can claim for the three ways you can work at home:

What you can claim		How you work
	Home is your place of business or work and you have a home work area	Home is not your place of business but you have a home work area	You work at home but you don't have a home work area
Occupancy expenses Cost of owning or renting the house	Yes	No	No
Running expenses Cost of using a room (such as gas or electricity)	Yes	Yes	Yes
Business phone costs	Yes	Yes	Yes
Decline in value of office plant and equipment (such as desks, chairs and computers)	Yes	Yes	Yes
Depreciation of curtains, carpets, light fittings, etc	Yes	Yes	No

How much can I claim?

There's no maximum amount that you can claim. Provided that the amount you're claiming is calculated in accordance with the rules and that you have the necessary substantiation to back up your claim, you can claim whatever you're entitled to.

Methods of claiming home deductions

Receipts or other written records/evidence

In making home office deductions, ensure that you can substantiate all expenditure claims through receipts of diaries. This includes:

Receipts for items of equipment you have purchased
Diary entries you make to record your small expenses ($10 or less) totaling no more than $200, or expenses you cannot get any kind of evidence for, regardless of monetary amount.
Diary indicating your running expenses related to working in your home office. Here, you need to detail the time you spend in the home office compared with other users. Keep a diary record for a minimum 4 week representative period. This can also include calculations of how much you used your equipment.
Itemised phone accounts from which you can identify work-related calls.

Australian Tax Office rate per hour

As an alternative to keeping such records, you can use a fixed rate of 52 cents per hour for each hour that you work from home to allow for home office expenses. Under this method, you can also include the decline in the value of office equipment (such as computers and faxes) but not furniture. In this case, you are unable to make additional claims for individual items.

The following costs are not deductible as part of home office expenses:

Mortgage or interest costs
Rates and taxes
Depreciation on the home.

The ATO has implemented a shortcut method to cover the period from 1 March to 30 June 2020. During this time you claim a deduction for $0.80 per hour of documented work, and this covers all deductible running expenses. But note that, if you use this method, you cannot claim any other expenses for working from home for that period.

Examples

Method 1: Actual running expenses

Betty has the following home office running expenses, including energy expenses that have been calculated using electricity authority hourly costs per appliance. The figures are based on four weeks of diary entries.

		Deduction amount – this year $	Deduction amount – future years (assuming similar use) $
Decline in value of desk	Value $350 over 10 years	35.00	35.00
Decline in value of chair	Value $150 over 1 years	150.00	Nil
Electricity for 60W ceiling light	0.7c per hour for 10 hours per week for 48 weeks	3.36	3.36
Electricity for computer	1c per hour for 10 hours per week for 48 weeks	4.80	4.80
Electricity for heating/cooling	9c per hour for 10 hours per week for 48 weeks	43.20	43.20
Total deductible amount		236.36	86.36

Method 2: Rate per hour

Using this method, Betty is able to use a simple and quick calculation for her expenses: 52 cents per hour for 10 hours per week for 48 weeks = $249.60.

Note: Method 1 gives a greater deduction for Betty this year because of the immediate write-off of a chair costing less than $300. However, Method 2 will allow greater ongoing deductions with a simpler calculation assuming that future use and electricity costs remain similar.

Remember – if you are not sure if you can claim an expense, keep the receipt and we will ensure that we claim all allowable deductions and rebates for you whilst preparing your tax return.

This information is intended as a guide for Australia Wide Tax Solutions clients. All actual detail and circumstances differ, please discuss your situation with our registered tax agents. Remember – if you are not sure if you can claim an expense, keep the receipt and we will ensure that we claim all allowable deductions and rebates for you whilst preparing your tax return.

New Year Resolutions for Your Finances

With another Christmas celebrated and already showing up on our waistlines, a common topic of conversation for many of us in January is our New Year resolutions.

Whether it’s a pledge to give up smoking, get to the gym more often, or start (yet another) healthy eating regime, New Year resolutions usually have a self-improvement or healthy living focus. But what about your finances? A healthy financial situation is just as important to your well-being as a healthy diet and exercise regime. Here are a few New Year resolution suggestions for your finances that could make a big difference to your financial health in 2017 and beyond. If one of these appeals to you, please give us a call as we’d love to help you achieve your financial New Year resolutions this year.

“I will make a proper budget and stick to it.”

Did your credit card debt go up or down in 2016? Spending more than you earn is surprisingly easy to do and having to pay exorbitant credit card interest on all of your purchases just makes matters worse. The secret to turning this situation around is to create a proper budget for yourself and stick to it. It’s also a good idea to include repayments on your credit card as a weekly expense in your budget outgoings, so you can work on getting your debts paid off as well.

To create a realistic budget, list all of the things you need to spend money on and how much they cost. The amount you have left over each week is the amount you can afford to spend on the things you want, put into your savings account, or use to pay off your debts sooner. It’s also important to review your budget regularly to see how you are tracking.

If you have multiple credit card debts, or a variety of debts, you may find managing your budget a challenge as a large part of your income may be lost on interest payments. This kind of situation is frequently referred to as a ‘debt trap’. Talk to us about consolidating your debts to reduce your interest payments and make your financial situation more manageable.

“I will make an effort to achieve my saving goals.”

The ability to save money consistently is a talent that everyone should cultivate. It’s particularly important if you’re saving a deposit for your first home, as a lender will take your savings history into consideration when deciding if you are eligible for a home loan.

If you are the kind of person who finds it hard to stick to a budget, can’t resist impulse purchases, or indulges in ‘retail therapy’, then you may like to consider installing an app on your mobile phone that supports your efforts to save. ASIC’s MoneySmart website offers a variety of excellent free apps designed to help you manage your finances:

TrackMyGOALS integrates techniques that are proven to work for successful savers.
TrackMySPEND helps you see where your money is really going so you can adjust your spending habits to save more. Even just committing to reducing the number of take away coffees you buy each week can make a big difference over a full year!

“I will stop wasting my money on rent.”

For many people, choosing to rent a property instead of buying one boils down to a lifestyle choice. It may be more affordable to rent a property in a location where you enjoy living, than it is to buy one. But the consequence of this choice is that when property prices rise, you are potentially missing out on some significant capital gains that could be important to your financial well-being later on in life.

What’s more, the money you spend on rent is wasted – you are potentially paying off someone else’s investment when you could be paying off a property of your own. So the question is: do you have enough money for a deposit?

If you have been saving regularly and have some money in the bank, now is a great time to take stock of what kind of property you may be able to afford this year. Just give us a call and we’ll be happy to sit down with you and help you work it out!

Getting on the property ladder may mean that you have to consider a location where you can afford to buy, rather than a location where you prefer to live. It may mean giving up your short commute home from work, or easy access to your friends and family, favourite bars, shopping venues and cinemas. But with property prices rising steadily, the long-term benefits could have a significant impact on your future financial security and retirement lifestyle, so it could be worth it to act now.

“I will review all of my financial accounts, including my home loan”

When was the last time you stopped to think about how much money you are paying on fees every year for your mortgage, bank accounts, credit cards and superannuation plans? Most people would be horrified to discover exactly how much money they lose every year in fees and charges across their financial accounts – so it definitely pays to review them regularly and cancel any unnecessary accounts you hardly ever use and don’t really need.

For example, the fees and charges you pay on your superannuation accounts can be quite high and they often go unnoticed. Over the years, these fees and charges may add up to make a big difference to the balance of your super on retirement. The fact is, if you have more than one superannuation account, you are paying double the fees you need to pay! Consider consolidating all your super accounts into one as soon as you can.

The same rule applies to your credit cards. How many do you really need? What are you using them for? If you have more than one, it may be a good idea to transfer all of the balances to one card using a free balance transfer offer. This not only has the potential to save you a significant amount of money on fees, it could also save you some money on interest and perhaps, help you to pay off your credit card balances sooner. Don’t be tempted to keep all of the old cards though, remember to cancel them as soon as you make the balance transfer.

If you have a mortgage, now is a good time to look at which features and benefits it provides, and if you are using them. Do you really need them? Is your home loan the most suitable for your current financial goals? If not, talk to us so we can see if you could be saving on fees, getting a more favourable interest rate or accessing the loan features you need!

We can help you achieve your financial New Year resolutions

Our role is to help you arrange your credit and finance to maximise the money you have. We’re here to help you save on interest wherever possible. Whether it’s time for a home-loan-health check on your existing mortgage, or you would like to find out how much you can afford to spend on buying a property, you’ll find our expertise and support invaluable in helping you to achieve your goals. We are even willing to help you find better ways to manage your debt and plan to build wealth for your future.

Financial success means setting some financial goals and making a step-by-step plan to reach them. With a credit and finance professional on your team, you are much more likely to get where you want to be. If you would like to buy a property in 2017, then we can help you achieve your goal by assisting with everything from setting your purchasing budget and getting pre-approval on your home loan, to supplying you with insightful property market data so you can locate the right home to buy more quickly.

Make sure your New Year is a happy one by talking to us about getting on top of your finances. It is one New Year resolution you’ll find very easy to keep! Call us to make a time today.

Reserve Bank leaves interest rates on hold at 1.5pc

It was the Reserve Bank's first meeting in 2017, as the board does not meet in January.

The decision came as absolutely no surprise, with all 72 economists surveyed by Reuters expecting the cash rate to stay at 1.5 per cent.

The relatively new Reserve Bank governor, Philip Lowe, writing just his fourth post-meeting statement, took a very neutral stance on the future direction of the cash rate.

"Taking account of the available information, and having eased monetary policy in 2016, the board judged that holding the stance of policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time," he concluded.

The bank is sticking with its forecasts for economic growth to come in around 3 per cent, brushing off the economic contraction recorded in the September quarter GDP figures, released in December.

Citi's economists interpret this as a strong signal that interest rates will remain on hold for an extended period.

"With inertia in both guidance and forecasts, the earliest possibility of a live RBA meeting won't be until the May 7 board meeting, which will be after the first quarter 2017 CPI [inflation] result and after three more labour force reports," the bank's analysts wrote in a note.

"Our central case remains no change in rates this year, but that the market is under-pricing the risk of easing."

Rising dollar a concern for RBA, but 'unperturbed' on housing

However, this outlook could be complicated were the Australian dollar to build on its recent strength.

"The depreciation of the exchange rate since 2013 has also assisted the economy in its transition following the mining investment boom," the governor noted.

Further rises in the Australian dollar, towards and past 80 US cents, could potentially provoke the RBA into cutting interest rates to try and lower the currency and sustain export competitiveness.

One widely cited constraint on the possibility of further rate cuts is the strong price growth in Australia's two biggest housing markets - Sydney and Melbourne.

On that front, the governor made a lot of factual observations, but drew no conclusions about what the state of the housing market meant for monetary policy setting.

Although he appeared relatively relaxed about the effectiveness of the banking regulator APRA's measures to avert excessive risky home lending.

"With leverage increasing, supervisory measures have strengthened lending standards and some lenders are taking a more cautious attitude to lending in certain segments," Dr Lowe added.

RBC economist Michael Turner observed that the governor, "sounded relatively unperturbed on developments in the housing market."

There are two other Reserve Bank events on this week that are more important than the rates meeting.

On Thursday night, RBA governor Philip Lowe will deliver his first speech for 2017 at an economics dinner in Sydney.

On Friday morning, the RBA will release its latest quarterly Statement on Monetary Policy, which should give a clearer indication of the outlook for interest rate movements this year.

What to consider when buying your second property

If you have already purchased your first home, congratulations! The next step in building wealth for your future could be to plan for the purchase of a second property as an investment.

Owning two properties is a great financial ambition and with Australian house prices on the rise, doing so has great potential to improve your financial situation in the long term. But please don’t be fooled – just because you have done it once before doesn’t mean it will be easy! Buying a second property also requires hard work, discipline and effort. Here are some financial pointers to help with the process of buying your second property.

Property purchase purpose
The first thing you need to understand is why you want to buy a second property. Are you planning to rent out your original property and buy something else to move into? Are you buying a ‘renovators dream’ to knock down and develop? Are you buying because you want a beach house and you will spend half your time in each location?Really understanding why you want a second property before you set out will help to inform all your other decisions in the property purchasing process. For example, if you are buying as an investment property, decisions around location, capital gain potential and rental yield will influence you in a different way than when you are buying something for yourself to live in.
Your cash flow and budget
There are no two ways around it – having a second mortgage is going to have a significant impact on your monthly cash flow! Ask yourself: can you easily service both mortgages? Do you have a stable income?Better still, keep a budget so you know what you can reasonably handle so you won’t over-extend yourself. The key here, and this is what a lender will look for, is your ability to earn enough to service both your first and second mortgage effectively, on top of the cost of living.
It is important to fully assess and understand your borrowing capacity. (We can help you with this – just give us a call). As with any other home loan application, your second mortgage will be assessed on your income versus expenses. Lenders will look at your overall position of asset and liabilities, which means if you have any existing debts such another mortgage (which you do have), personal loans or credit cards, your borrowing capacity is going to be less, compared to if you were debt-free.
When considering your cash flow and budget, it is also well worth including a ‘safety buffer’ contingency plan. This could be three to six months’ worth of repayments and living expenses, or similar, depending on your savings ability. It is important to have a safety buffer if you are hoping to use your owner-occupied property as security to fund the deposit for the second home.
Will you be renting out one of your two properties?
If the answer is yes, and for most of you we imagine that you are buying a second property for investment purposes, it’s essential to get a rental estimate for your second property before you make your purchase.If you are just in the research stage, having a rough estimate of rental income will help with setting your budget and understanding your cash flow (see point 2), but if you have chosen ‘the’ property to buy, most lenders will require a rental estimate letter from the real estate agent currently handling the property at the application stage.
Lenders will factor in any possible rental income (if applicable) when determining your borrowing capacity, ensuring it is set at a safe limit – reducing your risk and theirs!
When choosing a property for rental income, it’s important that the property is well located and will be easily tenanted so that it continues to generate income and support itself.
Loan type & loan structure
Interest rates have been very low for some time, which makes it a great time to consider buying a second property. And right now there are literally thousands of home loan options out there for you to consider. However, there are many variables to take into account when financing your second property purchase – so it’s a good idea to give us a call. Finding the right home loan product for your financing needs depends entirely on your current financial position and your short and long term goals. This is why the right advice is imperative when taking on a higher amount of debt across two different properties. It is best to speak to us about these options and the best way to structure your finances, before you even choose a property to buy, so you don’t get stung later on in the process. A few scenarios we could discuss include:Using your existing equity
If you’ve lived in your first home for some time, there’s a good chance you have grown your equity. Equity is the difference between what your home is worth and how much you owe on it. For example, if your home is worth $550,000 and you owe $200,000 then you have $350,000 in equity.
Tapping into this equity could give you a larger deposit for your second property purchase, which could be beneficial for your borrowing capacity and your overall budget. If you’re looking to do this, you will need to have your home revalued. In order to determine how much equity you have in your home, a lender will perform a valuation using an independent valuer before determining how much you can borrow and approving your loan.

Refinancing or staying with your current mortgage lender
Buying a second property offers the perfect opportunity to give your existing mortgage a health check. Use the opportunity to consider your home loan needs in relation to your future goals and ask yourself how well your current loan is performing for you. If you’re satisfied with the service your lender is providing and you have determined that the interest rate and fees you’re paying are competitive, there may be no need to refinance to another lender. However, there are some record low rates on offer at the moment and if you have had your mortgage for some time, it would be worth talking to us about what other home loan products are suitable for you and your goals.

Buying your second property is by no means a small task. We are here to help you with your financial goals, so please chat to us about how we can structure your loan so your second property purchase can really set you up for the future.