TAX TIPS: How coronavirus will affect your tax return
TAX returns are never a simple process, but thanks to coronavirus, there is even more uncertainty over how we can conduct our personal finances.
With the end of the financial year looming with a June 30 cut-off, we asked Warwick accountants to bust some tax myths.
I’ve been receiving JobKeeper or JobSeeker. How will this affect my tax return?
According to Condamine Accountants director Laura Babington, this one of the most frequently asked questions.
Both the $1500-a-fortnight JobKeeper wage subsidy and fortnightly $1100 JobSeeker payments are part of a person’s taxable income, according to Ms Babington.
“As far as business goes – COVID-19 has made this year a lot different to previous — seek advice before 30 June to ensure you are aware of all that has to be done,” she said.
“If you are receiving JobSeeker this will be reported to the ATO from Centrelink. If you are receiving JobKeeper from your employer this will be reported through your payment summary.”
BNW Accountants’ Justin Nolan also advised people check out the Australian Taxation Office (ATO) website to see if they’re eligible before coming in.
“Have the records there to help us work out whether, from your financial information, you meet the criteria,” he said.
For the 2019–20 financial year, employers with 20 or more employees will have until July 14, 2020 to make a final declaration, while employers with 19 or fewer employees will have until July 31.
Can I claim rent / mortgage living expenses if I was working from home?
With many working from home, during the pandemic, this has been another point of concern.
Ms Babington said the ATO have updated the home office rate, effective as of March 1.
“The ATO guidance has changed from 52c per hour to 80c per hour,” she said.
“Obviously there are three different ways to calculate that, so it just depends on the client’s circumstances as to what rate applies.
“The key things here is that you must have spent the money, the expense is directly related to earning your income and you have a record to prove it.”
The ATO warns there are certain things you cannot claim, such as general household items (things like coffee, tea and milk), and it is best to check out the guidelines online.
Mr Nolan agreed it was best to check before trying to claim every part of working from home on tax.
“You have to be able to prove it’s a case of working from home, and not a case of working all day in an office but claiming you’re at home for that same period,” he said.
Ms Babington said to keep working hours logged in a roster, time sheet, diary or similar.
Can I get compensation for reduced hours / income?
Whether workers who had hours slashed may be eligible for tax help is entirely dependant on the individual, Ms Babington said.
“All that will happen is that you may have dropped a tax rate, depending on what bracket you’re in,” she said.
“But that is purely circumstantial depending where you fall in the tax break.
“For instance, if you earn $45,000 a year, and your taxable income comes down into $36,000-37,000, you may pick up a bit of relief.”
This is the same for landlords who may have lost rent during the pandemic.
What are some tips for a stress-free tax return?
Both Ms Babington and Mr Nolan agree the best way to beat this tax return is through being prepared.
“I always tell everyone to keep every receipt and docket they have that relates to business,” Mr Nolan said.
“If you can’t claim it, we can throw it in the bin but you can’t reclaim it from the recycling centre.”
Ms Babington added that in a time of uncertainty, accountants were the best bet for a simple return.
“This year so different to any other, if you have any concerns, it is the year to seek professional assistance,” she said.
“Don’t leave your tax to the lodgement due date – schedule your appointment with your tax agent.”