Unless you’re in the accounting business, tax time is not fun. Given coronavirus has thrown a spanner into the works for many of us, it’s going to make things even less fun. In light of this, the ATO is providing a few extra tips to help make the process a little less infuriating.
We’re fast approaching the end of another financial year and that means getting our shit in order. Many of us will make a last minute rush to scrounge for receipts and evidence in order to maximise our tax return. That’s no easy feat if you’ve been neglecting it all year and have to now consider expenses resulting from coronavirus restrictions, which physically changed the way we worked.
By now, it shouldn't come as a surprise the ATO focuses on certain hotspots at tax time to call out taxpayers who have either accidentally or deliberately made errors. To avoid falling into a trap, here's what you need to look out for in two key areas: work-related expenses and claims for investment properties.Read more
The ATO has released some information about how Australians might account for a pretty big year.
“This tax time the ATO expects to see a substantial increase in people claiming deductions for working from home or for protective items required for work,” Assistant Commissioner Karen Foat said in a media release.
Because of the changes to our working setup — whether it’s shifting to home work or wearing protective clothing — the ATO will let you claim any expenses incurred relating to coronavirus.
“Taxpayers working in jobs that require physical contact or close proximity with customers or clients during COVID-19 measures may be able to claim a deduction for items such as gloves, face masks, sanitiser or anti-bacterial spray if they have paid for the items and not been reimbursed,” Foat said.
“This includes industries like healthcare, retail and hospitality.”
Previously the ATO announced a new shortcut method to make it easier for people who preferred to choose the easy way out. Between 1 March and 30 June 2020, anyone wanting to claim working from home expenses could calculate it at 80 cents for every hour worked. You won’t be able to claim for other expenses if you choose this method, however, and some tax accountants have said some could lose out on tax money as a result.
What you still can’t claim, the ATO added, is travelling expenses to and from work, even if you were required to go to the office every now and then during the restrictions. It also expects laundry expenses will be down given many workplaces were closed.
“It’s still important to meet the three golden rules: you must have spent the money and not have been reimbursed, it must relate directly to earning your income, and you must have a record to prove it,” Float said.
What if I was on JobKeeper and Jobseeker during some of the year?
Both JobKeeper and Jobseeker payments received during the financial year are taxable so they’ll need to be factored in to your final yearly total. For JobKeeper payments, it should be included in your income statement, which is accessible through MyGov.
For Jobseeker recipients, the summary of payments should be loaded under the Government Payments and Allowances section of your return. If it’s left out, you could face a tax bill later on.
Any other payments received as an income, such as stand down payments by employers, will also need to be included in your final tax return.
The one exception is anyone who decided to use the early super withdrawal arrangement. Foat said it would be tax-free and didn’t need to be declared in your tax return.
Naturally, it’s all still a bit confusing if you’re not particularly familiar with how it usually works. You could either defer the work to a tax agent or if you’d rather do it yourself, the ATO offers a Tax Essentials guide to run you through it.
For any lingering or nuanced questions you might have, there’s also an ATO-endorsed forum to help assist you with the particularly curly ones.
“If you’ve read through the information on our website and still have a question, search our online forum ‘ATO Community’. This forum is available 24 hours a day and we have a great community of expert members who respond to questions. In a lot of cases, there’s an ATO-endorsed response to help you. If not, post it yourself and we’ll have a response back to you as quick as we can,” Foat said.
Visit that precious resource here.
The ATO's shortcut is a godsend for any lazy tax return DIY-er but a tax expert has said it might not give you the best bang for your buck. Here's why.Read more