Dear Valued Clients,

For upcoming Financial Year 2021 Tax Return, we would like to inform you about COVID-19 related tax deductions as well as new individual tax rates. We hope this information will be of assistance to you.

 

Personal Tax Rate Changes

For 2020- 2021, 19% threshold has changed from $37,000 to $45,000, and the 32.5% threshold has changed from $90,000 to $120,000. Please refer to Individual tax rate table below:

 

 Low- and middle-income tax offset (LMITO)

Low- and middle-income earners may be eligible for the low-income tax offset and the low- and middle-income tax offset. The LMITO amount is between $255 and $1,080.

The full offset is $1,080 per annum but you might not receive the full $1,080. The base amount is $255 per annum. Please refer to the table below:

Taxable income Low and middle income tax offset
Less than $37,000 $255
$37,001 – $48,000 $255 + (Taxable income – $37,000) *7.5%
$48,001 – $90,000 Maximum $1,080
$90,001 – $126,000 $1,080 – (Taxable income – $90,000) *3%
$126,001+ $0

 

Medicare levy low-income thresholds

For 2020-2021, Medicare levy low-income threshold are below:

  • For singles – increased to $23,226 (up from $22,801 for 2019-20).
  • For couples with no children – increased to $39,167 (up from $38,474 for 2019-20).
  • For each additional dependent child or student – increased to $3,597 (up from $3,533).

 

Working from Home deductions

If you work from home due to COVID-19, you can claim a deduction for the additional expenses you incur. The measure is applied from 1 July 2020 to 30 June 2021.

Expenses you can claim

  • Electricity for lighting, cooling, heating and running electronic items used for work
  • Cleaning costs for a dedicated work area
  • Phone and internet expenses
  • Computer consumables (e.g. printer paper, ink) and stationery
  • Home office equipment (e.g. computers, printers, phones, furniture) – can claim either the full cost of items up to $300 or depreciation for items over $300.
  • depreciation and repair of capital items e.g. home office furniture, furnishings including capital items that cost less than $300

 

Expenses you can’t claim

  • Coffee, tea, milk and other general household items
  • Costs related to child education e.g. online learning, iPads, desks
  • items paid directly by your employer e.g. laptop, phone
  • Time spent not working
  • Rent, mortgage interest, water, rates

Method

Total number of hours worked from home from 1 July 2020 to 30 June 2021 * 80 cents

Records to keep

  • Timesheet
  • Roster
  • Diary
  • Similar document that shows the hours you worked

 

 

Please contact us if you have any enquires in relation to above matter.

Thank you.