The COVID-19 pandemic has thrown much of life as we know it on its head.
We’ve been disrupted in all aspects of our lives, including how we work and, for many, our income amount and sources. Across the country, Australians have taken on fewer hours, worked in different fields, accessed government benefits (directly or indirectly), or adapted to working from home.
What can be claimed as a deduction, and how some deductions can be calculated, has also changed. With all of these changes, it’s unsurprising that taxpayers are more eager than ever to maximise their 2020 returns.
As always – your Bentleys team are here to guide you through tax time. The following handy tips and links will help you to get started.
1. Get the essentials
The ATO has a ‘Tax Time Essentials’ resource that will give you the run down on what’s different this year, and how it impacts your tax returns.
2. Early accessed super isn’t assessable
For the almost 2 million Australians who accessed super early under the Government’s COVID-19 scheme, these funds won’t count towards your assessable income.
3. Working from home?
Many more workers pivoted to remote working as lockdowns and social distancing became the norm. If you worked from home, you may be eligible to claim a deduction for your home office expenses. The ATO has a few methods you can use to calculate your expenses – including a new ‘shortcut method’, made specifically in response to the impact of COVID-19 on workplaces.
4. Did you stop working?
Many couldn’t work from home, and due to lockdown restrictions, were forced to take leave, or were unfortunately stood down. If this is you, you will need to declare any payment from your employer – ongoing or one-off – as wages and salary on your tax return. This applies regardless of whether the payments were funded under JobKeeper.
5. Were you made redundant or terminated?
If you were made redundant or had your employment terminated, your year-end income may contain a tax-free portion and a concessionally-taxed portion. You therefore may pay less tax. Ask your advisor for more information about this.
6. Are you a business with employees?
Although not income tax return related, we thought it important to remind businesses lodging their June 2020 Business Activity Statements that the second wave of economic stimulus via the Cash Flow Boost payment will be paid.
Ready to start preparing your 2020 returns? Jump over to our checklists and worksheets page to streamline the process.
We, at Bentleys, are doing everything we can to help individuals and businesses come out of this challenging time in good shape.
We will continue to update our COVID-19 resource hub with important developments, so please return soon.
Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.