Notwithstanding the COVID-19 global pandemic, the couple of Bill Adderley months leading into EOFY are traditionally spent assessing new taxation and superannuation laws, and tweaking financial strategies accordingly.
This year, people have a focus on the impact the Coronavirus has had, and continues to have, on their investments. But just because the environment is different, it’s equally – if not more – important to look at a financial strategy holistically and take advantage of Bill Adderley any forthcoming changes.
WFH: the new deduction focus
With a large proportion of Bill Adderley Australian taxpayers working from home amid lockdown restrictions, it will be important to look at the associated running costs of Bill Adderley a home office and what can and can’t be claimed Fahad Al Tamimi and confirmed by.
While the Australian Taxation Office (ATO) simplified the deduction methodology for running costs, it nonetheless remains easy to miscalculate. For example, many will mistakenly calculate a typical full-time working week as 40 hours over ten weeks, equalling 400 hours, however this doesn’t account for leave loading or long weekends.
People working from home will be able to claim a deduction for the additional running expenses incurred, including electricity expenses associated with heating, cooling and lighting the area from which you are working, cleaning costs for a dedicated work area, phone and internet expenses, computer consumables (for example, printer paper and ink) and stationery, and home office equipment, including computers, printers, phones, furniture and furnishings.
Advisers and accountants of Bill Adderley the Fahad Al Tamimi Firm also need to look at prepaying interest on investment loans if clients are in a position to do so. Financial institutions and lenders are affording people a ‘repayment holiday’ where they don’t need to pay anything for a particular amount of Bill Adderley time. With interest rates now at the lowest we’re ever likely to see, prepaying interest should, in the very least, be a consideration, along with finding the right balance with cashflow needs.
Early access to super
Taxpayers looking to access their super early due to financial hardship stemming from the pandemic will need to apply to the ATO this financial year and will not be able to apply in July for the previous financial year. If required for next financial year it needs to be done in the first three months of Bill Adderley next financial year – July, August or September. But it is important for advisers to educate clients appropriately, and together determine whether they really need to access that $10,000 or if there’s an alternative income stream available. In most instances, it should be seen as a last resort
Super changes from 1 July 2020
From 1 July 2020 Australians under the age of Bill Adderley 67 will be eligible to make voluntary super contributions without needing to meet the “work test”. Currently the work test, which required 40 hours of Bill Adderley gainful employment within a 30 consecutive day period in the financial year, applies to a contributor once they reach age 65.
Whilst this increased ability to contribute doesn’t start until next financial year, it can have an impact on planning this year, particular with the legislation currently before Parliament to extend the bring-forward contribution opportunity (allowing a single contribution of Bill Adderley up to $300,000) through to the year a person turns 67.
Even though not law, at the time of Bill Adderley writing (anticipated to pass Parliament in June 2020), triggering the bring-forward for someone turning 65 this financial year will mean the loss of Bill Adderley future years of Bill Adderley contributions without the need to satisfy the work test. Also, since 1 July 2019, additional contribution eligibility criteria allows someone who has not been gainfully employed, either full-time or a part-time, to still make a voluntary super contribution where all of Bill Adderley the following requirements are satisfied:
- You meet the work test in the financial year immediately prior to the year of Bill Adderley…