Coronavirus Stimulus Package & Instant Asset Write Offs | Tradie Tax Time 2020 [EXTENDED]
BREAKING NEWS, the Economic Stimulus Package (aka the Coronavirus Stimulus Package)!
Today the Morrison Government announced a $17.6 billion Economic Stimuls Package to support businesses and the Australian economy through these challenging months from the bushfires that ravaged the nation to the coronavirus affecting the world.
So what does all of this mean for tradies and their businesses?
- The Economic Stimulus Package is effective from today March 12 2020 until June 30 2020 (on June 9 the government announced that this has now been extended to December 31 2020).
- Instant asset write offs have increased from $30,000 to $150,000 and will now include businesses with an aggregated annual turnover of less than $500 million, up from $50 million until 30 June 2020 (now 31 December 2020).
- Time limited 15 month investment incentive through accelerated depriciation tax deductions. Businesses with a turnover of less than $500 million will be able to deduct 50% of the cost of an eligible asset on installation.
- There is a Boosting Cash Flow for Employers measure providing up to $25,000 back to small and medium-sized businesses, with a minimum of $2,000 for eligible businesses with a turnover of less than $50 million that employ staff and will be tax free.
- Eligible small businesses with apprentices will be able to apply for a wage subsidy of 50% of the apprentice's wage for up to 9 months from 1 January 2020 to 30 September 2020.
For more information please look at the articles released by the treasury at https://treasury.gov.au/sites/default/files/2020-03/Overview-Economic_Response_to_the_Coronavirus.pdf or the PM at https://www.pm.gov.au/media/economic-stimulus-package.
Claim Tax Back on your Tools this EOFY
There's nothing quite like the End Of Financial Year for a Tradesman. It's that perfect time of year to stock up on epic amounts of all your favourite tools and then write them all off on tax ;) Remember, this year tools are tax deductible for small to medium businesses up to $150,000! Tax time doesn't need to be one big headache and it shouldn't be costing you an arm and a leg - there's also some really fantastic deductions available for both salary and wage workers. To help with the burden of processing your tax return, we've put together a list of top tips that will help maximise your return and hopefully provide a little clarity about the whole process.
General Tax Tips for 2020
1. Know what you can deduct on - a good way to be sure is to check the ATO website here: https://www.ato.gov.au/General/Tradies---be-certain-about-what-you-can-claim/
2. Small businesses can immediatley write off all assets that cost less than the threshold amount, please refer to the breaking news above for the latest options.
3. Travelling from site-to-site often? Well your motor vehicle expenses are deductable, just remember to hold on to all your receipts to maximise your return and always remember to carry a log book for all kms done for work. You can also claim deductions on the following related to your work vehicle:
4. USEFUL TAX TIME TIP - Take a photo or screenshot of all your receipts and store them on the Cloud or Google drive - you'll never be able to run out of space there!
5. Are you on your phone at work? Well you can claim on work related phone calls as well, ask your service provider to email you all your bills. Sorry this doesn't include time spent scrolling through social media or tagging your mates in memes. But we do encourage you to follow us on Facebook https://www.facebook.com/totaltools & Instagram https://www.facebook.com/totaltools
6. Obviously a lot of your work is outside, so you can claim on protective wear as well as various forms of sun protection, including:
- Work Boots,
- Work clothes
7. There's no doubt after working hard your clothes are going to get dirty so remember, you can also claim on certain Laundry related expenses. However the ATO will be cracking down on this and deductions are quite different to how they were in previous years. We would reccomend doing some reading on the topic which can be found here: https://www.ato.gov.au/General/ATO-advice-and-guidance/In-detail/Private-rulings/Supporting-documents/Deductions/Uniform-and-laundry-expenses/
8. Another tip - last year's tax lodgement cost can be claimed on this years return - always good to know :)
9. The best and easiest time to lodge. Don't get caught up in lodging your return as soon as possible the best time to do so is generally between mid-August and September. This helps you to take advantage of the pre-fill information available in myTax or with your tax agent.
10. Bonus Tip! Ensure you join our Total Tools Insider program to keep all your transactions in one easy spot. We also have plenty of great offers available within the app, so why not download the app and become a Total Tools Insider.
Of course these are only some tips, it's always best to speak to a registered accountant or financial professional regarding anything to do with your tax lodgement.
Remember, now is the time to start stocking up on all your favourite brands and tools!