If you want to file your taxes on your own up to October 31, 2021, or May 2021 if you use a tax professional, you can do it online at any time. But before you get in a hurry to send in your tax return, you should make sure you have everything you need to complete it in the correct manner and that you are aware of all the COVID-related deductions for which you could be qualified.
In the event that you have been working from home, not working at all, working reduced hours, or receiving payments from the government for benefits of any kind, you may be qualified to claim certain additional deductions when filing your taxes.
If you use a tax agent, you have until May 2021 to submit your tax return after hiring one, and you are not required to file your return as soon as possible. Before submitting your tax return for the 2019–20 fiscal year, you should ensure that you have an up-to-date income statement from your employer. This is because you may have paid more tax than was necessary throughout the course of the year.
It is also a good idea to spend some time investigating other deductions that you might be entitled to claim this year and the proper way to do so in order to maximise the amount of money that you save on taxes. A few hundred additional dollars may be included in your tax return as a result.
This year, as a result of the coronavirus, there are a few additional items that you might be able to claim as deductions on your tax return.
Are there costs associated with working from home that you may deduct?
Have you spent a significant amount of time this year working from the comfort of your own home as a result of the widespread outbreak of the coronavirus? In March, Australians were instructed to work from home if they could do so in an effort to slow the virus’s progression. This indicates that hundreds of thousands of individuals suddenly chose to work from their living rooms rather than their offices (or, if they were really fortunate, their home offices).
The good news is that you may, in fact, deduct the expenditures associated with running your home office when you file your tax return. The Australian Taxation Office (ATO) recognised a significant rise in the number of individuals engaged in home-based business and consequently developed a straightforward and expedited mechanism to process claims.
Beginning March 1, 2020, and ending June 30, 2020, you are eligible to receive eighty cents for every hour working at home. This overarching principle applies to all of the operating expenditures of your home office, including the costs of home Internet service, home heating and cooling systems, and the office equipment itself.
This year, the restrictions have been loosened by the ATO, which means that you are no longer obliged to have a specific home office set up either. This indicates that you are still qualified to make a claim even if you perform your work from the comfort of your own sofa using your laptop. Though, things like tea and coffee that are often provided by your work are not eligible for reimbursement.
Unfortunately, you will not be able to take a tax deduction for any costs associated with your kid’s education and training. When your kid has been receiving instruction at home, any additional supplies, tools, or resources you have had to buy might be considered personal costs by the Australian Taxation Office (ATO).
The fundamental reason for this is that you are only allowed to claim tax deductions for costs you have incurred that affect your potential to make revenue. This is why your costs related to learning, such as attending seminars and completing supplementary coursework, are eligible to be deducted from your income. These factors are seen as beneficial to your ability to keep your job or improve your chances of finding work.
It is possible that you will be eligible to deduct the cost of any personal protective equipment (PPE) that you have purchased in order to reduce your risk of becoming infected with the coronavirus. However, you are only allowed to claim these charges if the things in question are essential to the performance of your work.
For instance, medical personnel such as nurses, ambulance drivers, and general practitioners are eligible to get reimbursement for the cost of purchasing gloves, masks, and hand sanitiser to wear while on the job. If, on the other hand, you have purchased the identical products for your personal use at home and while you are out and about (such as when you are doing the grocery), you will not be able to deduct these expenses since they are not directly tied to your work.
Our tax deductions guide has many additional suggestions for deductions that you might be able to claim on your taxes.
Paying Taxes on Payments Made to Job-Seekers and Employers
When filing your tax return for the 2019–20 fiscal year, you might be required to complete some additional procedures if you were paid through the JobKeeper or JobSeeker programmes during that period.
Your JobKeeper payments are subject to taxation, that much is true. These contributions are subject to the same level of taxation as your regular income would be under the current system. In other words, they will be counted as part of your overall taxable income for the year and subject to taxation at the same rate as applies to your standard marginal revenue.
When it comes time to file your tax return, you won’t need to do anything more to report these payments because you already did so. Your company will pay you in the same manner that it would under normal circumstances and deduct the appropriate amount of tax on your behalf.
Despite the fact that the JobKeeper payments have to be included in the calculation of your taxable income, if it turns out that you paid an excessive amount of tax throughout the year, you will get this money back when you file your taxes. If you are receiving JobKeeper payments and your annual income is less than the amount that is exempt from taxation for the current financial year (less than $18,200), then you will not be required to pay any income tax.
At tax time, the total amount of your taxable income will include the payments you received from JobSeeker and the majority of the benefits you received from the government. You will need to be ready to pay any tax that is owed on this income when you complete your tax return unless you have expressly asked that Centrelink retain a small amount of each payment for Tax. In this case, you will not need to be prepared to pay any tax that is owed on this income.
To reiterate, if your total income for the year, which includes any payments you received from JobSeeker, is less than $18,200, you are exempt from paying income tax on that income. If you asked Centrelink to deduct tax from your JobSeeker payments during the year and you ended up earning less than $18,200 for the year, the tax that was withheld from your payments will be refunded to you when you file your taxes at the end of the year.
Paying Taxes on Payouts Received Due to Redundancies and Annual Leave
Here is what you should do if you have received a lump-sum payment for your yearly leave or a lump sum payout for being let go from your job due to redundancy.
When you lose your job, you may be entitled to severance pay, exempt from taxes and not counted as part of your taxable income. On the other hand, if your payout amount is substantial, the government may require you to pay taxes on some of it. Your length of service at the firm will determine the total amount of your severance package and the portion of that package that is exempt from taxation.
The amount that can be earned in 2019/20 without being subject to taxes is $10,638, plus $5,320 times the number of years that you have worked for the firm. This is only one illustration:
Let’s imagine you’d worked for the firm full-time for two years and received a redundancy benefit of $20,000 when you were let go.
$10,638 plus ($5,320 times 2) is $21,278; this is the maximum amount that may be earned tax-free.
Because of this, the entirety of the redundancy payment you get will be exempt from taxation, and you will not be required to include it in your income statement when you file your tax return.
Things would be a little bit different if the amount of your redundancy payment were $30,000. In this scenario, the threshold for avoiding taxes is still set at $21,278; however, any sum that exceeds this threshold will be subject to taxation. A tax agent may assist you in ensuring that you are accurately disclosing your redundancy payout and that you are not paying any further tax than you are obligated to pay.
Your company is obligated to pay you any unused annual leave balances if you are laid off from a full-time position or voluntarily quit your work. When you leave your work, you are entitled to receive a lump sum payment equal to the value of any unused annual leave that you have accumulated over the course of your employment.
In contrast to a severance payment, the whole amount of your annual leave payout is taxable at the rate that applies to you normally. Before you actually receive the money, your company will deduct taxes from it first. This indicates that you do not need to take any additional steps in order to disclose it since the lump payment should be immediately included in your tax return under the heading of your assessable income.
Because the government was given early access to the superannuation system, the first half of the year 2020 has been a very active one for the superannuation industry. As of June 2020, more than 1.5 million people in Australia were given permission to use their retirement savings early. If you took some money out of your superannuation during the current financial year, you don’t have to worry about disclosing this information when you file your tax return.
When your employer first contributed to your fund, your superannuation would have already been subject to taxation at the special tax rate applicable to superannuation, which is now 15%. Because of this, you do not have to include this money as part of your taxable income declaration to the Internal Revenue Service. It is not taken into consideration as income that you earned throughout the course of the fiscal year, and tax has already been deducted from it.
Because this will take place in the next fiscal year, there will be no repercussions for your tax return for the 2019–20 year if you decide to take money out of your super during the second round of the programme (which will take place between July 1 and September 30, 2020).
How can I get the most significant possible return from my taxes?
Here are some helpful hints that will guide you through the process of filing your tax return and (hopefully) maximising your refund.
Take this seriously, and get the ball rolling.
We are speaking about your financial resources here. It has been “taken” from you, and it is up to you to “reclaim” it as your own property. Therefore, gather all of your documentation, bury your head in the paper, and concentrate.
If you have seen the receipt previously, you won’t need to go over the same document for the following five times and still be confused about what you need to do. Sign into your account on the ATO website, print off the necessary paperwork, and then begin filling them out.
The sooner you get started, the more manageable it will appear to be. The mentality that things can be handled tomorrow will only lead to the accumulation of further tension.
Maintain your order.
You will never be able to finish your tax return form in a single day, no matter how hard you try. Additionally, it is recommended that you do not complete everything in a single day. Rather than doing it all at once, space it out over a few days so that it is less of a chore and more of an experience that you can look forward to rather than something you can’t wait to get over.
Make a timetable and sort the evidence papers into their respective categories when you have done so. When everything is in its proper place, you’ll be astonished at how simple things become.
Put off getting money as much as you can.
Putting off the payment of taxes by postponing the collection of revenue is a popular strategy. Find out where the money is coming from and investigate the several methods in which you might postpone making that payment until the following financial year.
As a result, you will pay less tax, which will result in savings for you. Those few bucks have the potential to go a very long way. It is not about how diligently you save money; instead, it is about how strategically you go about doing it.
Use your car
There are several criteria that must be met before an automobile may be counted as an asset in a company. One of the prerequisites is that the deductible expenses must originate from the use of a vehicle in the course of business.
There are several methods for calculating the permissible deductions for an automobile, but the approach that takes into account every time you drive the car would be the ideal one to employ. There are many different ways to compute these deductions.
This strategy returns the most significant number of deductions; nevertheless, it requires the most work because it requires manual recording of the information over the whole fiscal year.
Pick the one that works best for you.
There are two primary approaches you might use when preparing your tax returns. One of the approaches is to do it on your own, and the other is to seek the assistance of an accountant. You have complete control over this matter.
Which of the following would you prefer: more effort or fewer returns? Instead of relying on an accountant, some people would rather have greater control over their personal and professional lives.
Whatever option you choose, making a choice as quickly as possible is essential since soon, accountants will be inundated with overwhelming work.
Help for those with annual incomes of less than $50,000
You also have the option of getting free guidance from people who work in the tax department. People with annual revenues of less than $50,000 are eligible for assistance from tax professionals through the Tax Help Program, which recruits and trains volunteers who have completed relevant training courses.
The volunteer programme runs from July 1st to October 31st. Some criteria must be satisfied in order to qualify for this service.
Find out all tax-deductible charges.
A long list of tax deductions is considered legitimate and can be claimed. There is a good possibility that you qualify for at least some of those opportunities. You will be entitled to claim up to $300 in work-related expenses even if you cannot provide supporting proof for those costs.
If you wish to claim more than $300, you will be required to submit appropriate proof for anything in addition to and including the initial $300. An example is our complete tax-deductible The business strategy of SavvySME.
Expenses that are not eligible to be reimbursed
The Australian Taxation Office (ATO) is committed to assisting taxpayers in accurately calculating their deductions, but they are also on the alert for warning signs that might indicate individuals are acting inappropriately.
Payment summaries or income statements are documents that summarise the money you have received from sources such as your job, your retirement fund, or various government agencies such as Centrelink and the Department of Veterans Affairs.
The interest you have earned over the term and any fees you have paid will be detailed on your bank statements. There’s a good chance that these were summed up for you by your bank, either online or at the bottom of your bank statement.
Statements for your shares, unit trusts, or managed funds will include information on any distributions or dividends you have been paid. You must include any dividends you choose to reinvest in your income declaration.
Statements of purchases and sales of investments are required in order to compute profits and losses on investments involving capital. Suppose you have any shares that you have recently acquired or sold. In that case, the relevant information can be found in your online brokerage account, or you can obtain it from your investment adviser or stockbroker.
Records from your rental property If you hire a property manager, you will generally receive an annual tax statement that includes your revenue and costs. If you do not use a property manager, you will need to keep these records yourself. If this is not the case, you will be required to compile information on the income received and the costs paid, as well as any capital gains or losses incurred as a result of the sale of the property.
Specifics on any pensions or other forms of income received from a foreign country.
Statement of private health insurance provides the information necessary to finish filling out the portion of your tax return devoted to private health insurance. Your health insurance provider is not obligated to give you a statement unless you specifically ask for one starting this year. Instead, by the 20th of July, the information will be automatically pre-filled into your tax return using myGov.
myTaxx is the portal that may be used to lodge tax returns with the ATO. You will need a myGov account that is linked to the ATO in order to be able to submit your tax return.
For individuals, the deadline for filing personal tax returns through myTaxx is October 31. It is feasible to submit tax returns later than this deadline if you are working with a registered tax agent.
Preparing tax returns seems simpler and more straightforward with each passing year. The government has pre-filled up a significant portion of the information that it has received from employers, health funds, government agencies, and other third parties. This makes the uploading of deductions via an excel form much simpler.
Because tax refunds are often deposited into the taxpayer’s designated bank account within two weeks of the return being filed, it is in the taxpayer’s best interest to complete their returns as quickly as humanly feasible.
Be careful to maintain track of all of your financial documents, including your spending. If you need any additional clarity, call your accountant or visit the ATO website. The ATO may require you to submit proof to support any claims that you make. If this happens, you should be prepared to do so.
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