2021 Personal Tax Returns

With the end of Lockdowns scheduled for midnight tonight it looks like we it will be Business as usual for us in July so we will be able to meet our clients in person this year to do your 2021 Personal Tax Returns. If you do prefer to meet via video call or over the phone or email we can still do this.

This year (2021) there been tax changes, for individuals;

The government brought forward stage 2 of the Personal income tax plan from 1 July 2022 to 1 July 2020 as part of the 2020–21 federal Budget.

Tax cuts in stage 2 of the Personal income tax plan apply from 1 July 2021 as follows:

  • the upper limit of the 19% personal income tax bracket was raised from $37,000 to $45,000
  • the upper limit of the 32.5% personal income tax bracket was raised from $90,000 to $120,000.
  • The low income tax offset (LITO) increased to $700 from 1 July 2020.
  • The government also announced in the 2021–22 federal Budget that the low and middle income tax offset will continue to be available for the 2021–22 income year. This change is not yet law.

From a tax deductions point of view remember that we still have some Covid specific claims like the 80c working from home rule and for many employees this 2021 financial year is the one where they have worked from home for 6 – 12 months so this home office related claims are important. 

From an Audit point of view two areas the ATO have flagged that I think are important for Individuals this year are;

  • Cookie cutter deductions – if you claimed $200 for boots the last 5 years then the ATO is likely to have a look at that. While claiming the same amount each year for relevant deductions may be reasonable in some cases and 100% legit in others the reality is expenses are rarely exactly the same each year. If you are claiming the same amount each year this is a red flag for the Tax Office and tells them you are making things up on your return. 
  • Rental Properties – in particular holiday homes and the related private use. It is very important to get your rental property claims correct, the Tax Office places a lot of scrutiny on this area.

If you are ready to do your 2021 Income Tax Return you can contact us here