It’s tax time…
But unlike other years, due to COVID-19 having a massive impact on our personal circumstances, there have been some big changes to how we do our tax returns. According to the ATO, nearly everyone’s circumstances have changed.
Here is scoop of things to know.
What can you claim while working from home?
Working from Home – How much can I claim?
To simplify things, the ATO has released an easy short cut method to make a claim from your working-from-home expenses. The Work from Home expenses internet, telephone, electricity, heating and depreciation of office equipment. You can claim 80 cents per hour for every hour you have worked starting from 01st March 2020. Using this method is easy to comply and only requires a timesheet or diary of hours worked from home.
Multiple people living in the same dwelling can claim the rate, and there is no requirement to have a dedicated work-from-home space.
Alternative ways to claim higher amounts
You can use one of the other two existing methods to calculate your working from home deductions.
Fixed rate method: 52 cents per hour + work portion of telephone, internet, mobile and other sundries.
Actual Expenses method: where you calculate the work-related portion of all your running expenses.
Jobseeker and JobKeeper tax-free?
As you may already know, most government benefits are taxed.
So, if you’re receiving JobSeeker or JobKeeper you will have to declare it as income on your tax return. For JobKeeper your employer would have already withheld the tax, so you don’t need to do anything different.
If you are a contractor and have claimed JobKeeper, talk to your tax agent for how to account it.
Been made redundant?
Often redundancies have up to three parts.
Some of the money will probably be tax-free (based on your years of service), some of the payment will be concessionally taxed (taxed at a lower rate than your marginal tax rate), and some money taxed at your usual marginal tax rate.
Your tax agent should help you work out these calculations.
Can costs of masks and hand sanitiser be claimed as expenses?
This depends on the role and you will need to discuss with your tax agent.
I took money out of my super early – do I have to pay tax?
No. Monies withdrawn under Superannuation Early Release Scheme is tax free and do not need to declare in the income tax returns.
Investment Property
If you have given a rental discount or a rent deferral, all you need to do is to declare the rent you have received in your bank account. Please refer to the end of year statement issued by your rental agency.
You can continue to claim all expenses such as strata, insurance, interest, depreciation etc. Even if loan repayment is deferred by your bank and you haven’t paid the interest yet, you can still claim the interest now because you’ve incurred that expense in 2020 financial year.
The ATO is advising people to wait until the end of July to lodge their returns.
Feeling overwhelmed by tax time changes due to COVID-19?
This year, working from home, government benefits, and other pandemic-related events have impacted how we do our taxes. Don’t stress!
SDP Tax Services can help simplify the process.
Our experienced tax agents can ensure you claim all the deductions you deserve, including the new working-from-home shortcut method. We’ll handle all the complexities and maximise your tax return.
