How the 2021 Federal Budget will affect your next tax return:
John is an accountant who has considerable experience offering professional services to sex workers and industry and has kindly offered to write commentary for RhED on occasion. We hope you find this article helpful.
The Federal Government’s major announcement late last year was the moving of the tax rates from 2022/23 period to this year, being 2020/2021. This means a reduction in tax deducted from wages by an average of 60 cents in dollar per taxpayer. As all sex workers are treated as sole traders, the effect on your tax payable will not be seen until you complete your 2021 income tax return.
For those sex workers who pay PAYG instalments on a quarterly basis, it will mean a reduction in your instalment and you would have received notices from the ATO following the announcement. Additionally, due to COVID-19, your earnings may have been reduced and you should be asking for a variation to the amount of PAYG instalments payable per quarter.
For those readers who are owners of licensed establishments, the amount of tax payable for company entities will reduce also due to a change in the company tax rates from 27.5% to 26%. This is good for the industry.
The 2020/21 budget also allowed for the continuance of job keeper and job seeker until March 2021, but it reduces the amount payable to business participants (see previous article).
The range of tax deductions for sex workers has not changed. We suggest you complete a spreadsheet of expenses incurred and keep receipts. If you start it today, you will be prepared for your next tax return!
For establishment owners, if you wish to employ an additional eligible employee as a receptionist or duty manager or administrative assistant and they are in the age range of 16 to 29 at $200 per week and 30 to 35 at $100 per week, then you become part of Job Maker. The person needs to commence between 7/10/20 to 6/10/21 and work a minimum of 20 hrs per week. The credit will appear on the IAS monthly or BAS quarterly reports.
For establishment owners and sex workers, if you buy new furniture, plant and equipment and/or a motor vehicle for the business, then the asset write-off limit has increased but the time limit is closing on 30/06/2021. To improve your premises for a COVID-safe environment, buy now. For motor vehicles, keep a record of usage for business activity in a logbook for a 13-week period.
Now remember, you can still complete your 2019-2020 income tax returns without late lodgement penalties due to the COVID-19 regulations. If you wish to do so, call 0414 532289 and ask for John.