Year End 2021 - Individuals
Coming into the new financial year, there are some important updates and ATO focus areas that individual taxpayers should be aware of.
Working from Home
If you worked from home during the 2021 financial year and spent money on work related items that were not reimbursed by your employer, you might be able to claim some of these expenses as a deduction – but not everything you purchase can be claimed. A summary of what can and can’t be claimed can be found on the ATO’s website. https://www.ato.gov.au/general/covid-19/support-for-individuals-and-employees/employees-working-from-home/
Cryptocurrency has become normalised to the point that there are Bitcoin ATMs in most Australian capital cities. The ATO estimates there are over 600,000 taxpayers that have invested in crypto-assets in recent years and it’s an area of keen interest to them.
The tax treatment of cryptocurrency depends on a range of factors, including whether the items are acquired with the intention of making a profit on sale or exchange in the short term or whether they are intended to be held for longer term investment purposes.
It is also important to recognise that a taxing event can be triggered when one item of cryptocurrency is exchanged for another item (that is, even if no cash proceeds are received on disposal).
The tax laws can be complex in this area and it’s important to ensure that you get the right advice.
It’s important to keep records of your cryptocurrency exchanges. The ATO regularly runs data matching projects, and they have access to the data from many crypto platforms and banks.
Superannuation Guarantee increases to 10%
The Superannuation Guarantee (SG) rate will rise from 9.5% to 10% on 1 July 2021 and will then steadily increase by 0.5% each year until it reaches 12% on 1 July 2025.
What this will mean to you depends on whether your employment agreement. If your employment agreement states you are paid on a ‘total remuneration’ basis (base plus SG and any other allowances), then your take home pay might be reduced by 0.5%. That is, a greater percentage of your total remuneration will be directed to your superannuation fund. For those paid a rate plus superannuation, then your take home pay will remain the same, but your superannuation fund will benefit from the increase. If you are used to annual increases, the 0.5% increase might simply be absorbed into your remuneration review.