In 2021 What You Need to Know About Your Individual Tax Return?

2020 was a challenging year for all kinds of businesspeople. Due to the ongoing COVID-19 pandemic and subsequent lockdowns, the economy had declined. Probably, you will never want to discuss it again. But, the hard truth is, there is still one aspect that you need to think about, and that is your taxes for the financial year 2020-21. Due to the ongoing COVID-19 pandemic, lots of changes occurred for the season. You may get worried about your income tax return, but here we discuss important details about tax return in 2021.

 

What is the deadline for an individual tax return in 2021?

 

For your tax return in 2021, you have time till 31 October of 2021 to do so. If you want to do it with the help of any professional tax accountant Perth, the deadline will be 15 May of 2022, which is an almost entire year past the financial year of 2019-2020. There will be concessions for other tax returns like company, trust, or partnership tax returns, which you can find on corresponding websites.

 

What are the different tax rates for the financial year 2020-2021?

 

Recently issued Budget 2020 had introduced forward planned 2022 tax rate adjustments which apply to the financial year 2020-2021. As per the budget, 19% tax bracket ceiling had lifted from $37000 to $45000 while 32% tax bracket ceiling had lifted from $90000 to $120000. The new brackets are given here.

 

$0 to $18200

Nil

$18201 to $45000

19c for each $1 over the amount $18200

$45001 to $120000

$5092 + 32.5c for each $1 over $45000

$120001 to $180000

$29467 + 37c for each $1 over $120000

$180001 and above

$51667 + 45c for each $1 over $180000

 

Considerable tax deductions and credits for tax season 2021

 

Both deductions and credits can help you to keep more money in the pocket. So, while filing your individual tax return, you must consider these factors. Tax deductions will help you lower the taxable income, while tax credits are amounts of dollars that are deducted from your tax bill. Tax credits are of two types, refundable and non-refundable. You can get the refundable credit if your credit is greater than the amount you owe. Your tax bill will be zero in case of non-refundable credit, but you cannot get any refund. 

 

Possible tax deductions are the expenses derived from a service or product that is directly connected to your business or job or whatever the income-generating activity is. Some strict rules and regulations control what can and what cannot be treated as a tax deduction in Australia. So, we always recommend seeing all the guidelines before your lodgement.

 

You can claim the general expenses as a deduction in 2021 are phone and internet costs, computer and home office expenses, and travel and car expenses (which include fuel, car maintenance, etc.). Others include occupation-specific uniform expenses, work uniform costs, education expenses, and also donations that are over $2.

 

A tax return is a compassionate matter which you should be very careful about while filing. So, it is always better to consult with any professional expert for valuable advice. There are numerous options available on the internet.

 

What documents do you need to do your tax return?

 

The personal income tax return is a lengthy process that takes much time and lots of information. So, to complete a tax return and receive the maximum benefits from a tax refund, you should submit several documents, where you must include income-related costs, work expenses, and other records. The papers will differ according to the industry you work in. Here is a compiled list of documents that you will need at the time of the lodgement of your individual tax return.If you have a trust or a company, then you will need additional documents.

 

·         Income documents 

Among the income documents, first, you have to submit PAYG summaries. PAYG stands for pay as you go, under which you have to include the payment summaries you have given to your employees. Next come government payments, pension payments, or other allowances. Dividend statements are also required. For income tax return, an interest report of a personalized bank account must be submitted. In addition to all of these, business income statement, rental property income statement, and documents related to all other income.

 

  • Work costs

In addition to income documents, you need to produce work cost documents, which are nothing but receipts. Buying work tools and equipment is an ordinary matter in business, and you need to keep those receipts. Apart from equipment, amounts are invested in purchasing office stationery too. Phone and internet are used for various purposes like communication, important information collection and those are chargeable. Sometimes, you may need to go on business travels, and those expenses should also be included in the tax return. Other expenses will consist of car fuel and maintenance costs, work-related educational costs, and also expenses in uniform and clothing.

 

  • Other documents

If your company donates money for charitable purposes, you should submit the corresponding receipts. As a conscious citizen, you certainly have income protection insurance and private health insurance. Details of these schemes must be provided. If you have any investments, enlist those documents too. Including rental property, expenses are also a must. Not only your details but your family details should also be submitted. Last but not least, the tax return will require the previous year’s tax return fee.

 

How do you get your tax refund?

 

After your lodge your tax return, you must give some time to get it processed. You will have the option to track your tax return progress through your myGov account, where you will find statuses as follows: Processing, Information pending, Under review, Balancing account (all these under ‘In Progress’), and Issued. If there is no status named ‘Issued,’ then you will find ‘Cancelled’ instead.

 

How long the process takes to complete?

 

The duration of the process generally depends on the online portal through which you lodge your tax. Some take two weeks, some 30 days. If installed through paperwork, the process will take as long as ten weeks.

 

Ending note

 

Tax return Perth remains the same as last year. There has been a change in the budget because of COVID-19, which led to an extended deadline. That is why we always recommend consulting with skilled professionals from Tax Return Perth.