Tax time is upon us once again. For those that aren’t aware, the financial year ended on the 30th of June. For the 2019 financial year, your tax return is due on the 31st of October. To make your life easier, we’ve pulled together an end of financial year checklist for you.
What is your employment status?
If you worked through Littlehubs, you’re classed as a contractor. If you haven’t already, you will need to apply for an ABN to complete your return. You can do that here.
If you worked through a nanny agency, or with a family for more than 30 hours each week, you’re likely an employee. This means you’ll need to ask your employer for your PAYG summary (tax summary) to complete your tax return.
If you aren’t sure if you are an employee or contractor, a contractor would generally:
Work with multiple families for less than 30 hours per week;
Work casually or infrequently; &
You would have some control over the hours you worked.
For more information on employees vs contractors, you can read it here.
How much did you earn?
If you were an employee, you can find your income in your PAYG summary
If you were paid in cash, you will need to add up what you were paid during the financial year (1 July 2018 - 30 June 2019).
If you were paid in cash and also by an employer, you will need to do both of the steps above to determine if you need to pay tax (if you haven’t had any withheld from your employer)
The ATO is cracking down on carers who are paid in cash who don’t declare all their income. In the event you get audited, it’s very important that you keep track of all your income (ideally on a monthly basis).
What can you claim?
A deduction is a cost that’s directly related to your child care work. You cannot claim expenses if your employer reimburses them e.g. petrol allowance given by the parent. Some examples of things you could claim include:
Memberships fees with associations e.g. Australian Nanny Association;
Workers compensation insurance;
Phone usage throughout the day to update the family;
Education or qualification in the child care sector i.e Certificate III;
Qualifications or verifications i.e your first aid certificate or wwc;
Car use (with the children); or
Any other costs that directly relate to your work.
How much tax do I need to pay?
This will depend on how much you earn and the tax bracket you fall in. Below is the 2019 chart to help you calculate how much tax you need to pay.
Please note: if you have been paid cash throughout the year, you may need to pay tax rather than receive a refund from the ATO.
How you can complete your tax return
You can complete your return through the MyGov portal. Otherwise, you can speak to your accountant who can complete the return on behalf of you.
Tips for the next financial year
Track your expenses and income monthly using an excel document;
The tax rates are changing for the next financial year. The new tax rates haven’t been set yet but you can read up on the proposed changes here.
Let us know if you find these tips useful :)
Please note that these tips are general in nature and you should speak to your accountant with any issues specific to your situation.