Do I need an accountant to do my tax return?

If you also have a job in Melbourne, Australia, then you are required to file your annual tax return in Melbourne each year. This requirement applies only if you have a job in Melbourne. The Australian Tax Office (ATO) asserts that the amount of money you made from your company over the course of the previous fiscal year can be deducted from your tax return.

However, the primary reason for doing this is to calculate the right amount of tax that you have already paid. If you have already filed your annual tax return but are still eligible for a tax refund, then your money will be paid to you even though you have already filed your return.

Despite this, it is natural that the process of submitting a tax return in Melbourne places a significant amount of strain on you. As a result, you are probably looking for some pointers in the current fiscal year 2020 so that you can reduce the amount of tax that you pay.

It may be beneficial for you to hire an accountant (who will need to be a registered tax agent) to prepare and file your tax return if you have a number of different sources of income, a number of different investments, and possibly even your own business, or if you have a large number of deductible work-related expenses.

Struggling to keep up with your bookkeeping? We're here to help. Hillyer Riches are qualified business accountants and business advisors who can take care of all your accounting and business advisory needs, so you can focus on what you're good at - running your business.

Contact us today at (03) 9571 5333 or info@hillyerriches.com.au for a consultation!

If, on the other hand, the only income you receive is from your employer, you don't have many deductions to claim, and you don't have investments that are making money for you, you might decide to file your tax return online by yourself using my Tax, which can be accessed through the myGov website of the Australian government. If this describes your situation, you might choose to do so.

If you are undecided about which path to take, the following advice and suggestions may be of assistance to you as you make your choice.

Tax tips and tax return hints

The close of the current fiscal year is drawing ever closer. We have included an overview of the several types of tax offsets and deductions that you might be eligible to claim, as well as some helpful tax tips and pointers in order to assist you in completing your tax return.

Offset by private health insurance

You could be eligible for a tax credit on your health insurance of up to 35 per cent, but it all depends on how much money you make and how old you are.

You are eligible to make a claim for a tax offset provided that you have not already requested a reduction in the premium that you pay to your health fund.

Offset for spouse's super contribution

There is a tax offset of up to $540 available annually for taxpayers who have made personal contributions to superannuation accounts on behalf of a spouse. This is a partial tax offset for spousal income up to $40,000 per year, and it is available for spouse contributions of up to $3,000 per year if that spouse earns less than $37,000 per year. Additionally, this is available for spouse contributions of up to $3,000 per year if that spouse earns less than $37,000 per year.

Tax offset for net medical expenses

If you have out-of-pocket medical expenses related to disability assistance, attendant care, or elderly care, you may be eligible for this tax break until the 30th of June in 2019.

Child care subsidy

The Child Care Subsidy (CCS) will begin to take effect on July 2, 2018, replacing both the Child Care Benefit and the Child Care Rebate. If you are presently receiving financial assistance with the costs of child care, you are required to complete an online Child Care Subsidy assessment through myGov using the online account you have established with Centrelink. If you don't anticipate needing financial assistance with child care costs until after July 2, 2018, you won't be able to start claiming the CCS using your Centrelink online account until after that date. myGov is the portal via which you'll make your claim.

Your family's total income is used in the computation of your CCS award. If your household earns less than $186,958, there will be no yearly cap placed on the amount of CCS benefits you can get. Your kid's CCS will be subsidised up to the yearly ceiling of $10,190 per child for each fiscal year if your family has an annual income that is greater than $186,958 but less than $351,248. If your family has an annual income of $351,248 or higher, you will not be eligible for CCS benefits.

Your child must meet the immunisation requirements, be under the age of 13, and not be enrolled in secondary school (unless an exemption applies) in order to be eligible for the programme.

Australian seniors' pensioner tax credit

If you are eligible for the Senior Australians Pensioner Tax Offset (SAPTO), you are able to earn a higher income before being subject to the Medicare Levy and Tax. If you are not eligible for SAPTO, you are subject to the standard tax rate. If your annual income is less than the following amounts for the 2017–18 fiscal year, you won't have to pay any tax.

• singles – $32,279 (a reduced offset applies to incomes up to $50,119)
• couples (each) – $28,974 (a reduced offset applies to incomes up to $41,790).

Super tax hints

When it comes to retirement savings, superannuation is a particularly tax-efficient vehicle to use. The following are some helpful hints that will assist you in getting the most out of your super.

Limits on contributions

Non-concessional or after-tax super contributions have a limit of $100,000 per person per year for the 2017/18 financial year. However, if you use the bring-forward provisions, you can increase this limit to $300,000 over the course of three years.

This limit is subject to your total super balance as of June 30 of the previous financial year. Concessional contributions, often known as contributions made using money that was pre-taxed, have a yearly cap of $25,000 per person.

Salary sacrifice

You are able to make contributions to superannuation from your pre-tax pay if you use a practice known as salary sacrifice.

After this, the portion of your compensation that you have decided to forgo will be decreased to reflect this change.

The benefits of doing so are twofold: first, your superannuation balance will increase, and second, if you follow this strategy, it may help you to cut down your taxable income and, as a result, the amount of tax that you have to pay as a result of having to pay less tax overall.

In addition, contributions to superannuation are taxed at a concessional rate of just 15% (up to 30% for those with incomes above $250,000) rather than your marginal tax rate, which could be as high as 47% in some cases. This rate applies to individuals whose income is over $250,000.

Contributions that are personally deductible

If you are entitled to contribute to superannuation, as of the first of July in 2017, you will be able to make voluntary personal contributions and claim a tax credit for those payments up to your concessional contribution maximum.

Because of this, you have more leeway to supplement the concessional payments that have been given by your employer, which is especially helpful if your company does not participate in salary sacrifice. You can, for instance, plan your last payments leading up to the 30th of June of each year to make the most of your concessional contribution limits and the tax savings that follow from them.

Super co-contributions

To be eligible for this programme, you must have an annual income of less than $36,813 and derive at least 10% of it from employment or self-employment. If you make a contribution to your retirement savings of $1,000 after taxes, the federal government may pay you the maximum possible retirement savings co-contribution of $500. This is referred to as the "maximum possible retirement savings co-contribution." If your annual income is $51,813 or more, you will no longer qualify for the co-contribution and will no longer be able to receive it.

The ATO will look at the information on your income tax return as well as the contribution information from your super fund in order to determine whether or not you are eligible for the tax offset.

Super splitting

It is important to keep in mind that if you and your spouse want to divide the money that was contributed to your retirement account, this can typically only be done in the year following the year in which the contributions were made. If you and your spouse have this desire, it is important to remember this restriction. As a consequence of this, starting on July 1, 2018, you and your spouse may be eligible to divide up to 85 percent of any concessional contributions (also known as pre-tax contributions) that either of you made to a retirement plan during the 2017–2018 fiscal year.

You can lower the amount of taxes that you owe in a number of different ways, one of which is by making the most of the money that you have saved for your retirement.

Gains and losses in capital

It is possible to reduce the impact of capital gains by offsetting them with capital losses, such as those sustained from the sale of an investment property or shares. For instance, you might have sold investments that were no longer suitable for your situation.

If this was the case, then any capital losses you experienced as a direct result of the sale are eligible to be deducted against any capital gains you made throughout the course of the year. This only applies if the sale was the sole reason for the losses. It is possible to "carry forwards" unused losses in order to offset capital gains in following years. This is done through the usage of the phrase "carry forwards."

It is strongly recommended that you speak with a qualified investment expert before making any changes to your existing investments.

Interest paid in advance

If you have an investment loan, you may be able to make arrangements to prepay the interest on that loan for up to a year in advance, and then you can claim a tax credit for the interest prepayment in the same year that it was made. This option is only available to borrowers who have an investment loan.

Negative gearing

Another tactic that can be employed to reduce taxable income is known as negative gearing. Investments that are "geared" make use of borrowed money to enable the investor to make a larger investment than they otherwise might have.

The term "negative gearing" refers to the situation in which the cost of borrowing money is higher than the income that is generated by an investment. This disparity qualifies as a tax deduction that can be taken. If you invest in shares, you may be eligible to get imputation credits, which can be applied towards lowering the overall amount of tax that you are responsible for paying.

Income security coverage

Any payments that you make towards a premium for an income protection policy that is held in your name are eligible for a tax deduction.

Individual Tax Returns: Tax Tips FY20

Keep good Tax Records

Every year, a large number of people fail to take advantage of tax deductions that are within their reach but which they fail to claim. As a consequence of this, it's possible that the vast majority of individuals among you are unaware that in this way, ATO owns millions of dollars. People are passing up the option to receive tax returns at the same time. Because of this, if you also want to claim your tax deduction, you will need to keep a record of every deduction you make. Bring to ATO's attention all that you are eligible to claim, and urge them to deduct it.

Charitable donation for a Tax deduction

It should come as no surprise that making a donation to charity is, and always has been, the most advantageous choice when it comes to minimising one's tax liability in Melbourne. You are eligible to receive a tax deduction for the amount that you donate when you file your return. To put it succinctly, it's the kind of thing where everyone comes out ahead. After making a donation, ensure that you acquire a receipt and have it with you at all times. Show the receipt to the tax office when it's time to file your taxes, and you'll get the deduction on your taxes.

Claim work-related expenses

When you file your tax return in Melbourne, you can even claim the money you spent on work-related things. On the other hand, if you aren't qualified for the claim, taking this step could put you in jeopardy. You are eligible to deduct a number of expenses on your tax return, including those related to tools, clothing worn specifically for work, laptops, mobile phones, safety gear, and a great deal of other things.

Get tax agent advice

In Melbourne, the highest proportion of persons in Australia use the assistance of tax agents when they are required to submit a tax return. Therefore, if you too want to reduce the amount of money you owe in taxes, you should seek the aid of tax agents or accountants as soon as possible. They are able to offer you an immediate solution for "how to improve tax refund," which can be found on their website.

Claim tax deduction for working at home

If you run your business out of your house or do any part of it there, you may be eligible for an additional tax deduction. For instance, if you are operating a business, you are most likely making use of your phones, computer, and other electronic devices; as a result, these things are also contributing to the costs of running your company. In a similar fashion, doing so enables you to qualify for the tax deduction available to you. It is necessary to include all of the following in the category of your expenses: the cost of cleaning, the cost of office furniture, the cost of repairing or purchasing the furniture, your phone bill, your power bill, and your home internet bill, etc.

Initial Home Super Savings Program

The First Home Super Saver (FHSS) programme has been subject to several recent legislative amendments that have an impact on it.

However, the amendments apply to FHSS release requests and contracts that were in good standing as of July 1, 2018, even though they won't take effect until July 1, 2019.

FHSS payment breakdowns

At the conclusion of the fiscal year, if you have had money released by your super fund, you will receive a payment summary. This is standard procedure. It will display the amount of tax withheld as well as the assessable amount of FHSS released.

We will not provide payment summaries until such time as we are convinced that all of the FHSS amounts have been paid to you, and only then will we do so. There is a chance that this won't take place until a few weeks after the end of the fiscal year. If the summary of your payment arrives after the 14th of July, you can anticipate receiving an email from us regarding the matter.

You are expected to include the FHSS assessable released amount in your tax return for the fiscal year for which you request the release. This obligation applies to the year in which the release was requested. It is important to differentiate between this year and the year in which you got the FHSS amount.

On the tax that is owing for this assessable amount, the FHSS tax offset in the amount of thirty percent will have been applied.

Where the FHSS amounts must be displayed, prefill

If you file your return electronically through myTax or through a registered tax agency, the amount of your FHSS payment as well as any taxes that were deducted from your paycheck will be pre-filled in your tax return. Alternatively, you can submit your return manually. You can use the payment summary that we have provided so that you can manually insert the appropriate information if these amounts are not pre-filled or if you file your tax return on paper. We have provided it for your convenience. Utilizing the payment summary that we have provided is a viable option for accomplishing this goal.

Notices of FHSS tax assessments and payment options

In the event that it is found that you are required to pay FHSS tax, an FHSS tax assessment will be issued to you. This evaluation will walk you through the reasoning behind why you are obligated to pay FHSS tax.

You have the option of paying your FHSS tax assessment using the conventional payment methods, such as BPAY, credit cards, or by setting up a payment plan for the amount owed.

Plan for Individual Taxpayers

The Personal Income Tax Plan that was submitted by the administration and included in the Budget for 2018–2019 has received approval from parliament. This plan was included in the budget for the upcoming fiscal year.

The following are some examples of changes that will take effect at the beginning of the 2018–19 fiscal year:

• an increase in the maximum taxable income before entering the 32.5 percent tax bracket from $87,000 to $90,000
• providing a brand new Low and Middle Income Tax Credit, Abbreviated as LMITO, for taxpayers who qualify
• you do not need to do anything in order to obtain this offset; rather, it will be calculated and applied to your income tax assessment automatically when you submit your income tax return.
• it will not result in a decrease in the amount of tax deducted from your paycheck.
• if you currently qualify for the low-income tax offset, you will also qualify for this new low-income earned-income tax credit (LMITO).

The Personal Income Tax Plan has been subjected to yet another expansion, which was unveiled in the 2019–20 Budget and is now law as a result of the notification that it would be made in that document. This suggests that the maximum amount that can be contributed to the LMITO each year has grown from $530 to $1,080, and that the base amount has increased from $200 to $255.

The amount of the offset or credit to which you may be entitled, as well as the amount of any refund, will vary from person to person depending on their specific circumstances, such as their level of income and the amount of tax that they have paid throughout the course of the year.

There is absolutely nothing further that has to be done on your end in order for you to submit your tax return. Even if you have already handed in your return, the revised offset amounts will be taken into account when calculating the total amount of tax that you are responsible for paying.

Do I need an accountant to do my tax return?

Lodging Your Tax Return Yourself

If your financial situation is not very complicated, you may want to file your tax return on your own (which you are required to do by October 31 for the preceding fiscal year) in order to save money on the fees that you would otherwise pay to a registered tax agent.

According to the Australian Taxation Office (ATO), one of the advantages of submitting your tax return electronically through the myTax system is that it is safe, secure, and the majority of the information required from your employer, bank, and other government agencies will be pre-filled for you by the middle of the second week of August.

In the meanwhile, whether you have assets, rental properties, capital gains, or if you operate as a single trader3, you can still utilise myTax even if your circumstances are a little more complicated than average.

In addition to this, the service is offered 24 hours a day, seven days a week, which means that you can file your return at any time, and you will typically receive your refund within two weeks, which is potentially a faster turnaround time than using another method.

Engaging A Registered Tax Agent

It is crucial to keep in mind that you will be required to pay a fee for the service of a registered tax agent in the event that you decide to employ their assistance in preparing and submitting your tax return; however, in most cases, this fee will be deductible in the subsequent tax year.

It is important to note that tax agents are required to be registered with the Tax Practitioners Board (TPB), and the website of the TPB can be used to locate a registered tax agent or determine whether or not a person is registered.

If your financial situation is more complicated, taking this route may help you feel more at ease because it will likely save you time, bring to your attention deductible work-related expenses that you were previously unaware of, and ensure that all of your claims are founded in reality.

On top of that, the vast majority of licenced tax agents have access to a unique programme that allows them to lodge returns for their clients after the normal October 31 cutoff date. This allows them to maximise their clients' refunds. However, you will need to get in touch with them in advance in order to confirm that this is an opportunity you can take advantage of.

Other Things To Note

You can use the deductions function in the ATO app to keep a record of your deductions during the financial year, and then upload this record when it comes time to lodge your tax return. This is possible regardless of whether you intend to lodge your tax return on your own or hire a professional.

Check out the tax time checklist that the ATO has provided to ensure that you have all of the pertinent information you require before to submitting your tax return.

If you, too, are looking for some respite from Melbourne's tax return, continue reading. These are some of the most important pieces of advice you need to keep in mind for the 2020 fiscal year. These suggestions can turn out to be a magic elixir for you, one that enables you to make a tax deduction claim or increase the amount of money that you can save on your taxes.