It’s that time of year again, folks. From now until the end of October, Aussies all over the country will wince at how much tax they’re paying and lodge a return in hopes of recouping some of their precious pennies. However, this year looks a little different when it comes to your tax return because of COVID-19 and the global pandemic.
Speaking to SBS News, ATO assistant commissioner Karen Foat said, “lots of people are in a different circumstance this year, so people might have income types that they’ve never had before and also people might be entitled to different deductions than they are usually.”
COVID-19 restrictions and social distancing has forced many Aussies to work from home, but it’s also put a stop to most work-related travel – impacting the kinds of tax return claims that will be made.
According to the ATO – if you’ve been working from home – you can claim “additional running expenses such as electricity, the decline in value or equipment or furniture, and phone and internet expenses.”
It’s a bonus for those who have been working in isolation over the past few months, but there are limits to what you can claim.
Speaking of COVID-19, hear about life after lockdown below:
If you’ve been WFH due to COVID-19, the ATO states you can’t claim a deduction on general household items like coffee, tea or milk or expenses related to children and their education e.g. buying them equipment like iPads and desks. Finally, you can’t claim items like a laptop or phone that you’ve been reimbursed for or have been purchased by your employer.
Oh, and the same goes for your rent, mortgage interest, water and rates.
When it comes to calculating your deductions, there are a few methods:
The Shortcut Method
This method allows you to claim 80c per hour for every hour you worked from 1st March-30th June.
The Fixed Rate Method or 52 Cents Method
With this method, you claim 52 cents from every hour worked at home to cover electricity, gas and home office furniture costs. Then you separately add in your phone, internet and stationary costs, as well as the depreciation of equipment.
The Actual Expenses Method
This method requires you to calculate the work-related costs you’ve incurred while WFH individually.
If you’re on JobKeeper, your Payment Summary can be accessed via MyGov as per usual. If you’re on JobSeeker, however, you must claim the coronavirus supplement you’ve received as income when you do your tax return.
For those who accessed their superannuation early, amounts withdrawn come tax-free which means you don’t need to declare them as income in your tax return.
This year has been incredibly challenging – and we’re only halfway. At least your tax return doesn’t need to be complicated if you do your research, hit up the ATO for help and follow the rules.
Always be in the loop with our snackable podcast breaking the biggest story of the day. Subscribe to It’s Been A Big Day For… on your favourite podcast app.