The Australian Taxation Office (ATO) has confirmed it is expecting an influx of early tax return filings this year, following a challenging year which saw many Aussies swap their office for the kitchen table.
To help taxpayers navigate tax time 2020, the ATO has issued guidance on how different types of income and expenses may affect tax time this year, addressing particularly work from home and programs such as JobKeeper.
“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,” said assistant commissioner Karen Foat.
The ATO has already announced a temporary “shortcut method” that applies from 1 March 2020 to 30 June 2020.
The shortcut method — which allows taxpayers to claim 80 cents for each hour they’ve worked from home — covers all deductible expenses and can be used by multiple people working from home in the same house.
“If you use the shortcut method, all you need to do is keep a record of the hours you worked from home as evidence of your claim,” Ms Foat said.
“But it is all-inclusive, meaning you can’t claim for any other working-from-home expenses.”
Taxpayers can still choose to use one of the other existing methods to calculate their expenses for working from home if they prefer.
What if I’m on JobKeeper?
The ATO has confirmed that taxpayers who have received JobKeeper payments from their employer, don’t need to do anything different.
The payments will be included as salary and wages and/or allowances, in their regular income statement, which their employer provides directly to the ATO.
“Your income statement can be accessed via myGov and the information is automatically included into your tax return by the end of July,” Ms Foat said.
“If you use a tax agent, they also have access to this information.
“The figures in your income statement should already include any JobKeeper you have received. If you aren’t sure, check with your employer.”
Sole traders who have received the JobKeeper payment on behalf of their business are being told they will need to include the payments as assessable income for the business.
Recognising that many taxpayers have also accessed their super early, Ms Foat explained that there is nothing to worry about.
“If you received early access to your super this year under the special arrangements due to COVID19, any amounts you’ve withdrawn from super under this program are tax-free and you do not need to declare them in your tax return,” she said.
Last year, Aussies rushed to lodge their tax early following a tax cuts package which saw those earning between $48,000 and $90,000 gifted an offset of $1,080.
But this year is tipped to challenge the Tax Office even further, with people experiencing financial trouble keen to get their hands on their tax refund as soon as possible.
The ATO has set up a dedicated webpage to help taxpayers navigate tax time 2020. Other resources are also available.
“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,” Ms Foat said.
Businesses impacted by the coronavirus are being encouraged to get in contact with the ATO to discuss relief options, with Commissioner of Taxation Chris Jordan earlier announcing the ATO will work “shoulder to shoulder” with businesses to assist them through this difficult period.
“Support measures could include deferral of some payments, quicker access to GST refunds and options to enter low-interest payment plans for existing or future tax debts.”