Brokers beware: tax time is here
Publication Date: Thursday, 30 June 2022
This article originally appeared in Australian Broker
We are officially halfway through 2022, which means that much-dreaded process is about to hit us again – tax time.
As brokers begin scurrying to lodge their tax returns, Natalie Sheehan (pictured), head of distribution at non-bank lender Brighten Home Loans, has compiled a checklist brokers can use to close out the financial year on a high.
Sheehan said with the mortgage sector still reeling from back-to-back interest rate increases and the new era of federal leadership being ushered in, there has never been a more important time to ensure brokers are ready to maximise their tax return.
Let your tech do the heavy lifting
Sheehan said gone are the days brokers had to make do with pen and paper for wrapping up client activity, lodging records with the ATO and finalising accounts.
“With brokers busier than ever, many are putting their trust in technology to drive efficiencies and speed up processes,” she said.
“Technology is evolving at breakneck speed and it’s now less a question of which processes can be levelled up, but which should be. This is where automation comes into play as automation software can streamline your processes, drastically reducing complexity and time spent on EOFY admin.”
Sheehan said automation software could also chip away at accounts daily rather than quarterly or yearly.
“The right tool will allow for processing of income entitlements, provide daily reconciliation of transactions and enable instant and automated tax statements,” she said.
“Meanwhile, integrating other digital services such as receipt recording, time tracking or expenses management – all are great methods of saving broker’s time.”
Sheehan said brokers wanting to maximise their return should consider all deductions they are eligible for.
“Travel expenses, home office expenses, education and event internet and mobile phone connection expenses can be written off,” she said.
“It’s worth talking to a tax professional to determine which apply to you as it will help you remain compliant and the cost of tax advice is deductible too.”
Sheehan said brokers with their own business could take advantage of the instant asset write-off.
“Following the pandemic, the Australian government increased the threshold from $30,000 to $150,000, allowing brokers to claim an immediate tax deduction for all capital purchases costing less than $150,000,” she said.
“This can help recoup any large purchases made this year such as tech items, office furniture and equipment.”
Sheehan said brokers who had been working from home the year, either part time or full time, could claim a portion of home-related expenses.
“Some expenses you can claim include rent or mortgage interest, heating and cooling bills and home office equipment.”
New financial year, new me
Sheehan said the end of the financial year shouldn’t be all reports and numbers.
“It’s easier said than done, but early preparations for next year can ensure you’re receiving the deductions you’re entitled to as well as discovering new ways to increase your refund next time.
“It can also be time to reassess and tweak your business plan to ensure you’re on the right path for next year. Familiarise yourself with any regulation and law changes and implement these business changes before the start of the new financial year.”