To help you complete your tax return, this checklist outlines income and expenses you need to disclose to the Australian Taxation Office (ATO) when lodging your return. We’ve also provided an overview of the types of tax offsets and deductions you may be entitled to claim plus other handy tax tips.
Gross salary, wages, earnings, allowances, benefits, tips and directors’ fees as per the pay as you go (PAYG) payment summary supplied by your employer.
Lump sum and termination payments as per the PAYG payment summary supplied by your employer.
Annuities or other pensions, such as account-based pensions, as per PAYG payment summary or statements provided by your financial institution or super fund.
Taxable Government allowances or pensions, such as the Newstart Allowance, youth allowance and age pension.
Interest earned as per your bank, mutual bank or credit union statements.
Dividends received or reinvested, including any franking credits attached as per the dividend statements provided by the company.
Distributions from partnerships and trusts (including managed funds) as per the distribution statement provided by the partnership or trust.
Details of any capital gains or losses incurred from the sale of (or other dealings involving) capital gains tax (CGT)
assets, such as shares and property. This includes dates and values of acquisitions and disposals, as per purchase and sale documents.
Rent received from investment properties as per real estate agent statements or personal records.
Details of any foreign source income (including overseas pensions) earned or received, foreign assets held and any foreign taxes paid.
Work-related expenses that have not been reimbursed by your employer
Motor vehicle expense details for work-related travel in a personal vehicle, including the work-related kilometres travelled. This excludes travel to and from work.
Other work-related travel expenses, such as taxis, public transport and bridge tolls.
Purchase of compulsory uniforms, protective clothing and laundry costs for work-related purposes.
Self-education expenses, including fees, books, stationery, travel and parking.
Union fees and memberships to industry and professional organisations.
Purchase of sun protection, hats, sunglasses and sunscreen if you need sun protection at work.
Purchase of tools of trade or equipment for work-related purposes.
Telephone accounts for work-related calls.
If you are paid an overtime meal allowance under an award, you can claim up to the reasonable allowance expense amount set out by the ATO.
Attendance fees and travel for work-related seminars, conferences and conventions.
Books, journals, subscriptions and your professional library expenses.
Home oﬃce set-up expenses such as depreciation on purchase of equipment, including computers, telephones and furniture. Details of home oﬃce running expenses such as heating, cooling, lighting and cleaning.
Telephone accounts for investment-related calls.
Attendance fees and travel for investment seminars, conferences and conventions.
Interest paid and fees charged on money borrowed for investments, such as shares.
Bank fees incurred on investment-related activities and accounts.
Property rental expenses, including advertising, council and water rates, insurance, interest on loans, real estate management fees, repairs and maintenance, lease preparation, depreciation and capital works (such as buildings and structural improvements) deductions.
Note: From 1 July 2017, travel expenses relating to inspecting, maintaining, or collecting rent for a residential rental property cannot be claimed as a deduction.
Donations of $2 or more to registered charities.
Tax preparation fees, including travel to your tax agent.
Tax offsets and deductions
You may be entitled to the following tax oﬀsets (rebates) and deductions for the year ended 30 June 2019.
Private health insurance offset
Depending on your income and age, you may be eligible for a tax oﬀset of up to 33.4% on your health insurance.
If you haven’t claimed a reduced premium from your health fund, then you can claim an oﬀset in your tax return.
Spouse super contribution offset
If you made personal superannuation contributions on behalf of a spouse, there is a tax oﬀset of up to $540 per year. This
is available for spouse contributions of up to $3,000 per year, where your spouse earns less than $37,000 per year, and a partial tax oﬀset for spousal income up to $40,000 per year.
Net medical expenses tax offset
You may be eligible for this tax oﬀset until 30 June 2019, if you have out-of-pocket medical expenses relating to disability aids, attendant care or aged care.
Senior Australians pensioner tax offset
If you are eligible for the senior Australians pensioner tax oﬀset (SAPTO) you are able to earn more income before you have to pay tax and the Medicare levy. In the 2018/19 financial year, you will pay no tax on an annual income less than:
- singles – $32,915
- couples (each) – $29,609.
Super tax hints
Superannuation is a very tax-eﬀective vehicle to save for retirement. Following are some tips to help you maximise your super.
For the 2018/19 financial year the maximum non-concessional (or after-tax) super contributions are capped at $100,000 per person per year or up to $300,000 over three years using the bring-forward provisions. The ability to make non-concessional contributions and take advantage of the three year bring- forward provision is subject to your total super balance at
30 June the previous financial year, your age and whether you have satisfied the work test (if between ages 65–74).
Concessional contributions, or those made with pre-tax money, are limited to $25,000 per person per year. Please note voluntary concessional contributions such as salary sacrifice or personal deductible contributions are subject to age restrictions and the ‘work test’ (if between ages 65–74).
A salary sacrifice strategy allows you to make contributions to super from your pre-tax salary. Your salary is then reduced by the amount you choose to sacrifice. The benefits of this are two-fold: not only does your super balance increase, but this strategy could also reduce your taxable income and therefore the amount of tax you pay. Also, super contributions are concessionally taxed at just 15% (up to 30% for individuals with income over $250,000) instead of your marginal tax rate, which could be as high as 47%.
Personal deductible contributions
From 1 July 2017, if you are eligible to contribute to super, you may make voluntary personal contributions and claim a tax deduction up to your concessional contribution cap.
This gives you greater flexibility to top up your concessional contributions made by your employer, especially if your employer does not oﬀer salary sacrifice. For instance, you can time your final contributions leading up to 30 June each year and make the most of your concessional contribution limits and the resulting tax benefits.
If you receive at least 10% of your income from employment or self-employment and you earn less than $37,697, you may be eligible for the maximum super co-contribution of $500 from the Government for an after-tax contribution to super of $1,000. The co-contribution phases out once you earn $52,697 or more.
The ATO uses information on your income tax return and contribution information from your super fund to determine your eligibility.
If you want to split your super contributions with your spouse, don’t forget this usually can only be done in the year after
the contributions were made. Therefore, from 1 July 2019, you may be able to split up to 85% of any concessional (or pre-tax) contributions you made during the 2018/19 financial year with your spouse.
Apart from making the most of your super, there are other ways you can minimise your tax liability.
Capital gains and losses
A capital gain arising from the sale of an investment property or shares and capital losses can be used to oﬀset the capital gains. For example, you may have sold investments that were no longer appropriate for your circumstances and any capital losses realised as a result can be oﬀset against any capital gains you have realised throughout the year. Unused losses can be carried forward to oﬀset capital gains in future years.
Specialist advice should be sought before making changes to your investments.
If you have an investment loan you can arrange to prepay the interest on that loan up to 12 months and claim a tax deduction in the same year the interest was prepaid.
Negative gearing is another strategy used to manage tax liabilities. Geared investments use borrowed funds to enable
a higher level of investment than would otherwise be possible. Negative gearing refers to the cost of borrowing exceeding the income generated by the investment. This excess cost can reduce the tax you pay on other income. If you invest in shares, you may obtain imputation credits which can be used to further reduce the amount of tax you pay.
Income protection insurance
If you hold an income protection policy in your name, then any premium payments you make are tax deductible.
Resident tax rates for 2018/19
Note: Medicare levy of 2% will also apply where applicable.
Individual tax rates for the year-ended 30 June 2019
Up to $18,200
$18,201 to $37,000
19% of the portion over $18,200
$37,001 to $90,000
$3,572 + 32.5% of the portion over $37,000
$90,001 to $180,000
$20,797 + 37% of the portion over $90,000
$54,097 + 45% of the portion over $180,000
This information is issued by Financial Services Partners Pty Ltd (FSP) ABN 15 089 512 587, which holds Australian Financial Services Licence Number 237590 and is a summary of FSP’s understanding of current legislation. FSP is a company within the IOOF Group of companies, consisting of IOOF Holdings Limited ABN 49 100 103 722 and its related bodies corporate. The changes are subject to the passing of legislation and, accordingly, may not become law or may change. Please note that the information is based on FSP’s interpretation of the proposed changes as at the date of issue of this document. Accordingly, you must not do or refrain from doing anything in reliance on this information without obtaining suitable professional advice. In addition, the information is of a general nature and may not be relevant to your/your client’s individual circumstances. Before making any investment decision you must consider the relevant PDS, available on request by calling FSP. This information does not consider your personal circumstances and is general advice only. You should not act on any recommendation without obtaining professional financial advice specific to your circumstances. If you wish to opt out of future communications, please contact us.